Police warn against false insurance claims

Captain Balan Muthan, spokesperson for Honeydew Police Station warns against the abuse of state resources. Photo: File.

It has come to the attention of the local police station that motorists are taking advantage of the law by opening false cases in order to claim from their insurance companies.

This trend was discovered by Honeydew police following an increase in thefts out of motor vehicles reported at the station.

Spokesperson for Honeydew Police Station, Captain Balan Muthan warned about the act and vowed to lay criminal charges against perpetrators.

“There is a tendency where people are reporting false cases. These people come to the station and report false incidents because they want to claim from their insurances,” said Muthan, adding that if a motorist is caught, he or she will face criminal charges.

Following Muthan’s warning, the Roodepoort Northsider approached the office of the ombudsman for short-term insurance to establish how insurance companies gather information to ensure the verification of claims.

Although insurers use different underwriting methods, Peter Nkuna, the senior assistant ombudsman, unpacked the process involving the validation of a claim and the repercussions that may follow if a claim is a hoax.

“Their [insurers’] approaches to claims and claims validation differ. Most of the information is obtained from the insured person themselves and will be validated further, as the circumstances may require, at least from the perspective of the particular insurer. If there are witnesses or there is video footage, for example, some insurers would consider same,” he said.

Nkuna added that the repercussions of reporting a false case, would lead to a probe or cancellation of a policy. “The insurer would be entitled to decline liability for the claim if the policy so provides [or] the policy may also be cancelled.”

If a motorist is adamant about the claim and the insurer refuses to pay, Nkuna outlined how the office of the ombudsman intervenes and rules on the dispute.

“Disputes are considered using accepted legal principles also applied in courts and in other similar legal or quasi-legal processes. We only follow a simplified process and have minimal formalities. We consider only recorded or documented evidence, and cannot hear oral evidence.”

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