What does the insurer have to prove in a fraud investigation?

Fraud occurs when a person seeks to obtain a benefit under an insurance policy by deception. A fraudulent claim may be made in a variety of ways. It may involve deliberately damaging insured property and then making a claim, the deliberate insertion of false information in a claim form, and/or knowingly making false statements to the insurer to mislead the insurer.


Fraud is a serious allegation and the onus of proof is on the insurer to prove the allegation. To establish fraud the insurer needs to prove on the balance of probabilities that you intended to deceive the insurer or acted with reckless indifference as to whether or not the insurer was deceived.


If we establish fraud then we can reject your insurance claim and the policy may be rendered invalid.  This means you no longer have insurance cover. In serious cases, the matter may be reported to the police for further investigation and you may be charged with a criminal offence.


Both parties to an insurance contract have the obligation to act with utmost good faith towards each other. Where the insurer requests information and you refuse to provide it or they do not have sufficient evidence to prove fraud but they believe that you have provided inconsistent information they may reject your claim on the basis of a breach of the duty of utmost good faith.

Tags: fraud, good faith

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