Keeping it Honest

12 October 2016
Recently we heard of an incident that showed how keeping it honest with insurance agencies is essential – not just to be a good citizen but to avoid the severe ramifications if ever caught out.
 An insurance agency advised us that one of their clients had made a claim on vehicle insurance which was fraudulent. The clients had taken up vehicle insurance after a car accident had occurred and then  made a claim.  The insurance agency found out and the client was “red flagged” by the agency and the cover cancelled.  However the aftermath of this event relented – the “red flag” was registered to all agencies and now the clients are unable to be insured for cover for their vehicle, their household contents or their house.  
The major issue here is not only are they not covered if something should happen but it is now unlikely that that client would be able to purchase a home of their own.  In order to purchase a home purchasers often require a mortgage.  In order for a mortgage to be registered over the title of a property the solicitor acting on behalf of the clients has to confirm to the bank that they have evidenced that the house has full replacement insurance.  If they cannot show that then the bank will not advance the funds required to purchase the house.   So the end result is that the clients may never be able to own their own home.  
This type of “red flag” is likely to last forever – there is no stand down time and the reasons that caused this to happen will never be acceptable to any insurance agency.  
The lesson here is to make sure that when dealing with insurance agencies that you are honest at every point.  From the time you make your enquiry, to completing the application forms to get the policy in place to making a claim you should always be honest.  If in doubt “write it out”.  Better to argue with the insurance agency at the start of any process than make a calamitous mistake or judgement.  
While it may seem like a victimless crime in trying to get money out of a big bad insurance agency the fact is that if you lie to an insurance agency in order to get money out of them it is fraud and it is You the client that will suffer the most if caught.  

Published In Whakatane Beacon

This post was written by

Trish Marsden - who has written 96 posts

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