Santam highlights insurance fraud awareness

Santam, South Africa’s largest short-term insurer, reported 79 cases of commercial crime worth R7.3million in the year to date, that includes insurance fraud, forgery or falsification of documents and theft, the company says as it marks International Fraud Awareness Week from 3 – 9 November 2013.

"It is a real concern in the South African short-term insurance industry that year on year we see statistics showing a continued upward trend in the number of commercial crimes reported,” says Helen du Toit, Santam Head of Audit and Forensics.

Insurance fraud costs the short-term insurance industry an estimated R4 billion a year. Fraud is fast becoming a critical challenge and we at Santam are working with stakeholders like the South African Police Services (SAPS), to promote awareness of fraud and are continually improving our systems of detection and prevention.”

"We know that the majority of policyholders are open and honest in their claims, but practices such as ‘padding’ – when a handful of clients inflate their claim amounts, do occur,” says Attie Blaauw, Head of Personal Lines at Santam.

"While some people think adding a few rands to their claim is harmless, it does in fact, constitute fraud,” he adds.

The two most prevalent types of insurance fraud, says du Toit, are false claims, when policyholders submit a claim for an event that did not occur, and inflated claims.

"The consequences of a fraudulent claim can be dire. Those that are found guilty can face the repudiation of their entire claim, the possibility of criminal charges, and the possible cancellation of their policy.

"We can repudiate a claim in the event of a staged or fabricated incident, where the date or circumstances of the event has been changed or when the policyholder intentionally caused the event or loss,” says Blaauw, adding that falsified documentation or an inflated claim may also lead to repudiation.

We encourage policyholders to be aware of insurance fraud and ensure that they follow the right process in order for their claim payout to be successful,” concludes Blaauw.

Insurance tips for consumers:

• Understand your policy and know exactly what you are covered for. As a policyholder you need to understand the details of your policy and what you are covered for. Also ensure that all your details are updated and disclosed with your insurer.

• Review and update your policy. Policyholders often forget to inform insurers about changed circumstances and their accumulation of new possessions. It is critically important to update your policy annually, to ensure that any new items are accounted for and covered. It is also important to let your insurer know what improvements or additions you have made to your home or vehicle to avoid being underinsured.

• Check your comprehensive cover. Not all comprehensive cover is comprehensive. Common exclusions include alternate vehicle drivers and hail damage cover to your vehicle and home.

• Get an expert on your side. Intermediaries are a tremendous source of information and advice and can assist you with a many things from helping you update your list of insurables to providing your insurer with your updated information and most importantly, helping you with the entire process of lodging a claim with your insurer.