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Insurance scams seem to be one of the top preferred methods to solve people’s financial problems. What most people don’t realize though, is that insurance companies have ways and means to detect fraudulent claims and when they are suspicious about a claim but can’t prove that the specific claim is fraudulent, it gets referred to an investigations company who more often than not, gets them the proof they are looking for. And sometimes tip offs to the police get the suspects exposed before the insurance company even realizes that the claim is fraudulent.
In Pietermaritzburg recently, a woman reported her car stolen after a night out. According to Police spokesperson Captain Thulani Zwane, the woman claimed she parked her car at the venue at 20:00 and didn’t notice anything or anybody suspicious. She claimed the car was properly locked but when she returned two hours and fifteen minutes later at 22:15, the car was gone. She looked around and asked people in the area if they had seen anything but nobody had any information.
Captain Zwane said the police started an investigation but before they had any substantial information they were tipped off about a suspiscious looking car parked at Emboyi, near the Mkhambathini area. Upon investigation it was found that the vehicle had no registration plates. Police confirmed that the car was stolen by checking other details and after further investigation a 29 year old man was arrested.
He claimed that a woman asked him to take her car and burn it because she wanted to claim from the insurance. The amount of money he was paid to do this for her is unknown. He decided to not burn the car but instead keep it for himself and removed the number plates. He planned to hide the car for a short period of time before replacing the number plates but before he could do it the police was tipped off and the vehicle was found to have been reported stolen. To protect himself he told police that the owner of the car wanted the car burnt so she could claim from insurance.
Upon further investigation it was found that the woman had financial difficulties and was indeed planning to submit a fraudulent claim. The value of the car was around R65 000 (sixty five thousand Rand) and the money would have helped her to get out off financial trouble.
The two will appear in court shortly but one wonders if it is even worth prosecuting them as the punishment for fraudulent insurance claims are not harsh. Taking into account the average sentences for short term insurance fraud range between R10 000 (ten thousand Rand) and R20 000 (twenty thousand Rand) or between 2 (two) and 4 (four) years in prison which is often wholly suspended, it is clear that punishment is most definitely not harsh enough to act as a deterrent to the perpetrators of these crimes.
The South African short term insurance industry estimated an annual loss of around R6 billion Rand per year as a result of fraudulent claims. These losses have to be recovered from somewhere and the logical route would be to increase premiums which in turn punishes innocent people. Is it not time that we start looking at harsher sentences for convicted perpetrators? Is the lack of proper punishment the result of more and more people looking at insurance fraud as a way of income?
It surely seems that it is an easy way to acquire cash as only a few of the perpetrators are actually prosecuted and of those prosecuted and convicted, most receive very light sentences or prison sentences are wholly suspended.
The argument that these crimes are committed by perpetrators battling to survive is not valid either, because statistics revealed that people from all walks of life are involved. From accountants, lawyers and doctors to the working class.
The obvious solutions to stop or even minimize faudulent insurance claims are to firstly educate the broader public to understand the importance of reporting any suspicious activity around claims, as well as to give out much, much harsher sentences to convicted perpetrators. Only if examples are made of a few, will the rest take notice.
Developed in 2003, First for Women was the first insurance company to provide insurance options to women only, catering for their particular needs and meeting their short-term insurance requirements. First for Women car insurance has been inspired by the persistence and determination of South African women. Through First for Women’s principles of women and their natures, they are able to offer the women of South Africa cost effective and reliable car insurance quotes and options which are produced through the first for women car insurance.
First for Women car insurance offers a wide range of car insurance options which come hand in hand with specific benefits for women pertaining to the car insurance options, such as medical, trauma and road assist. There are three options for the prospective First for Women car insurance client. Firstly is the Comprehensive car insurance option which covers the woman’s car against general motor risks, as well as from third party damage and vehicles. The Third Part, Fire and Theft option offered by First for Women car insurance covers the client’s car from theft, fire and damage that is made to any third party’s car. Lastly, the Third Party car insurance provides coverage for the car of any third party that is part of the accident of the client of provides coverage for the car of any third party that is part of the accident of the client.
As an insurance company dedicated to providing unique and specialised insurance options, First for Women car insurance provides their clients the opportunity to continually review and evaluate their performance and customer satisfaction. This can be done by contacting their emergency assist number: 0861 00 50 52. More information on First for Women car insurance can be done by visiting their website on www.firstforwomen.co.za
