Insurance fraud involves intentionally misleading or fabricating
information to gain an unfair financial benefit from an insurance
claim or policy. While the threshold for proving fraud is high, if
established, it can have serious consequences.
Not only is it a criminal offence, but a fraudulent component in
a claim can result in the whole claim being refused. A recent
determination by the Australian Financial Complaints Authority
(AFCA) underscores this principle, reinforcing the
rights of insurers when faced with fraudulent claims.
Case overview: AFCA Determination 12-00-1056705
The complainant (a corporation and owner) of a lot within a
development lodged a claim under a Residential Strata Plan
insurance policy held by the owners corporation
(OC). The claim arose following a severe weather
event resulting in a number of lot owners lodging claims. This
particular claim had two components:
