Insurance Fraud Prosecution

Insurance Fraud Prosecution

13 May 2008

Hamilton Police are concerned at the number of people who are seemingly willing to risk prosecution by making false insurance claims.

Last week a 42-year-old woman appeared in the Hamilton District Court on a charge of making a false statement.

Found guilty, she was ordered to pay $640 reparations.

Sergeant Kent Holdsworth of the Hamilton Law Enforcement Team said the charge related to the woman claiming her vehicle had been stolen in February.

"As it turned out the Ford vehicle had actually been driven by a relative who had been drinking and crashed, that relative is being dealt with by Police as a separate matter.

"Initially an insurance claim had been accepted however as a result of our enquiries and court action that has been reversed and she will now have to cover the costs of repair and of course it'll be difficult for her to get insurance again."

Mr Holdsworth said people making such claims often had no idea just how many resources they were tying up.

"A Constable's time is calculated at $80 an hour and with a minimum of eight hours spent on these allegations a fine of $640 is quite appropriate.

"We have two more files to go before the courts and such cases cause us concern in a number of ways," he said.

One of the main concerns Police have is if the number of false claims increase officers may become sceptical towards genuine complaints and that in turn may impact on people's willingness to report crime.

"Then there is the inherent cost it has on all of us with higher costs of insurance policies and rates," said Mr Holdsworth.

Insurance Council New Zealand spokesman, Terry Jordan, agrees that fraudulent insurance claims have a flow on effect to consumers.

"While it's difficult to breakdown the cost of this type of vehicle fraud overall insurance fraud is a significant cost to insurers and customers.

"Surveys commissioned indicate there is a cost to insurers of between $150-300 million a year for all types of insurance fraud and Australian figures suggest in their country it costs on average $73 per family per year."

Mr Jordan is currently working as part of an insurance fraud working group tasked with highlighting the issue and costs of insurance fraud.

He can be contacted at the ICNZ on 04 495 8002.

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