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The claimant, who had previously received approval for fire damage repairs from insurer QBE in 2018, later filed a claim to cover the theft of personal property from the affected residence. Initially valued at $44,655, this claim was met with scepticism from QBE, leading to an initial denial.
It wasn't until 2021, following intervention by the Australian Financial Complaints Authority (AFCA), that QBE agreed to reopen the matter for assessment. The insurer subsequently offered a settlement of $34,263. Rejecting this, the claimant dramatically heightened the theft loss estimate to $132,693, seeking the insured sum of $100,000.
To support this escalated claim, the claimant presented multiple tax invoices. However, QBE's thorough investigation uncovered that these documents were manufactured using "an online tool." Metadata analysis revealed that the supposed invoices were generated long after the stated issuing dates, leading to the conclusion that they were falsified.
Though the claimant denied any fraudulent intent, AFCA determined "it is more likely than not that the complainant knowingly falsified documents with the intention of obtaining financial gain from the insurer." Under the Insurance Contracts Act, section 56 permits the insurer to decline the entire claim due to fraudulent activity, emphasizing that even legitimate claims can be annulled if fraud is involved at any level.
As reiterated in legal precedents cited by the ombudsman, "The complainant knowingly provided falsified invoices to the insurer to derive a financial benefit." In this instance, the purported fraudulent invoices approximated a significant total of $80,410.85.
The AFCA's decision underscores a broader policy directive—deterring fraudulent activities in the insurance sector. It adjudicated that upholding the denial "is neither harsh nor unfair considering the fraudulent elements involved." This case serves as a cautionary tale on the repercussions of insurance fraud, irrespective of any genuine losses claimed.
The outcome of this case aligns with the original report in Insurance Business, further reinforcing critical discussions within the industry about policyholder conduct and insurer's rights amid falsified claims. The AFCA's ruling clarifies that complete claim repudiation remains a necessary deterrent against fraudulently amplifying claims.
Published:Monday, 18th Nov 2024
Source: Paige Estritori
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