Insurance fraud has increased dramatically in these tough financial times, according to leading authorities in the industry.
Viviene Pearson, of the SA Insurance Association, said insurers had seen "a trend of increased fraudulent claims".
"Types of short-term insurance fraud include claims for events that did not happen, for example theft, burglary and hijacking, as well as inflated claims -claiming for a more expensive item than was actually lost, claiming for more items than were actually lost," she said.
The Association for Savings and Investments SA (Asisa) 2009 mid-year report found that KwaZulu-Natal had the most fraudulent cases, with 42 percent of all fake claims in the life insurance category, followed by Gauteng and Eastern Cape.
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Asisa, which represents most of South Africa's investment companies, said the life insurance industry foiled fraudulent and dishonest claims amounting to R375,9-million last year, the highest since the industry started collecting claims fraud and non-disclosure statistics in 2003.
While statistics showed that the number of claims were down, the value of claims had been higher.
"While the industry has been successful in clamping down on fraud, the value of attempted cases has increased," said Asisa deputy CEO Peter Dempsey.
He said the increase in the value of fraudulent and dishonest claims was of concern, but most claims submitted were honest and legitimate.
But if companies did not try to prevent claims fraud, the claims costs would increase substantially and ultimately force them to recover these losses from customers.
One of the cases involved a policyholder who submitted several fraudulent claims for a monthly disability benefit after neck surgery.
Dempsey said the policyholder claimed that she had not recovered within the expected time and requested an extension to the benefit several times, supported by medical certificates.
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