Dishonest claimant fails in claim against insurer…

Following a flood in Auckland a claimant made a claim to his insurer for damage to his car. He included a quote from a mechanic for the cost of the repairs. 

After inspecting the car the insurer found it to be a total loss due to water damage. The insurer contacted the New Zealand Transport Agency to place a ban flag on the car because of safety concerns. 

The claimant disputed this and said he needed his car to be repaired because he could not afford to buy a new car. 

The insurer then declined his claim. The insurer investigated the matter more closely and found that the damage in the car was present before the flood and the quote from the mechanic was also provided before the flood. 

As the claimant had deliberately made false statements the insurer placed a flag on the Insurance Claims Register. 

The claimant complained to the Insurance and Financial Services Ombudsman. 

The Ombudsman investigated the matter and found that the claimant’s policy contained a condition requiring the claimant to provide true statements in support of the claim. If the claimant was dishonest the insurer was entitled to decline the claim and cancel the policy. 

The Ombudsman concluded that the claimant had deliberately misled their insurer and so the insurer was entitled to cancel the policy and place a flag on the Register. 

Unfortunately for the claimant, the flag meant that he was unable to get house insurance. It made no difference whether the claimant apologised for his dishonesty or not, the flag was still noted on the Register. 

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