Auckland Anniversary floods: Man loses insurance coverage, could lose home over false claim

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Cars float in flood water after the deluge on Auckland Anniversary Weekend 2023. File photo.
Photo: RNZ / Pip Keane

A man who made a fraudulent insurance claim after last year’s Auckland Anniversary Weekend floods has lost his coverage and could lose his home.

Insurance and Financial Services Ombudsman (IFSO) Karen Stevens said the man had attempted to claim insurance for his car.

He made the claim for repairs to damage caused by flooding on January 27th, but his insurer later discovered the mechanic’s assessment was dated January 13th, two weeks before the floods.

The man’s claim was denied and his insurer put a flag on the Insurance Claims Register, which prompted another insurer to cancel his home and contents insurance.

“People don’t realise that if they are flagged on the ICR, the policies they hold with other insurers can be cancelled too, and all insurers will steer clear of giving them any new insurance from that point on,” Stevens said.

In an attempt to have his insurers remove the flag, the man apologised and admitted he had lied. However, the flag was simply updated to include “fraud”.

Stevens said the man complained to the IFSO Scheme.

“[He] made a complaint to us about being put on the ICR, and said his insurer lacked empathy because he was going to be ruined financially,” she said.

“However, insurers have clear policies regarding fraud, and it makes no difference if someone withdraws their claim or apologises for making a false statement.”

She said the man’s mistake would be costly.

“This means that he is unlikely to be able to get insurance from any other insurer now, including for his house and contents, and he’s now facing the possibility of the bank withdrawing the mortgage because he can’t get insurance for his house,” she said.

“It’s vital to always tell the truth to your insurer, as the consequences are just not worth it.”

Stevens urged other New Zealanders not to make the same mistake.