As economic conditions worsen in South Africa, many desperate
citizens are trying to make easy money by making false claims to their insurance
companies. However, these same companies are very much aware of the issue, with
many of them working directly with the police to try and curb the rise in false
insurance claims.
False insurance claims on the rise
The SA Insurance Association has seen a definite rise in the number of fraudulent claims.
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The latest 'trend' is for South Africans to fake home break ins and
claim that robbers grabbed valuables and electronic devices worth thousands. And
while analysts say that these types of false claims had always been around in
the industry, the numbers had definitely increased.
"It is very clear when a house has not been broken into, as the owner
claims," said Marius Heystek from AM Heystek and Associates, a company that
specializes in insurance fraud.
Heystek said that reports of genuine break ins also lead to inflated claims.
So, for example, in a home that was broken into and had a television worth
R20,000 stolen, the owners would take advantage of the situation and try to
claim back for other electronic goods - inflating the claim to as much as
R180,000.
While no official statistics exist for the actual rise in insurance fraud
figures, the SA Insurance Association definitely saw an increase in numbers,
according to its stakeholder relationship manager, Vivien Pearson. "When we have
difficult economic environments, there is the tendency for these things to
increase," she noted.
There have been some areas where close cooperation with the police force and
insurance companies have led to a significant drop in the number of false
insurance claims. In the Chatsworth and Verulam areas, for example, arson scams
used to be rife until the two bodies started working together. Since then the
numbers have dropped.
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