Insurance fraud investigations

What Is Insurance Fraud?

Insurance fraud happens when someone tries to get a benefit from an insurance policy by deception. Examples include:

• Providing false or misleading information in your insurance claim.
• Making false statements when applying for insurance.
• Taking out a policy after an accident and then claiming the loss happened later.
• Deliberately damaging property and making a false accident claim.

If an insurer believes your claim is fraudulent, they must prove it. This requires clear and convincing evidence. If fraud is proven, insurers can:

• Reject your insurance claim.
• Cancel your policy.
• Refer the matter to police, which may result in criminal charges.
• Report the fraud, making it harder for you to get insurance in the future.
• Cooperating With an Insurance Investigation

Investigation Process

If your insurer starts an insurance investigation, you are required to cooperate. However, their requests must be reasonable and relevant. Common steps include:

• Providing documents such as bank statements, phone records, or vehicle service histories.
• Allowing interviews, where you have the right to set boundaries (location, time limits, breaks).
• Naming other people who may provide information, though you don’t have to hand over someone else’s private data.

If you refuse to cooperate without a valid reason, the insurer may reject your insurance claim on the grounds you failed to act in good faith.

Your Rights During an Insurance Investigation

Even if fraud is suspected, insurers cannot treat you unfairly during an insurance investigation. You have the right to:

• Be asked only for information that is relevant to the insurance claim,
• Request reasons for any documents or evidence they ask for,
• Bring a support person to an interview, or request an interpreter if needed,
• Ask for copies of recordings or transcripts from interviews,
• Make a complaint if the investigation feels unreasonable, excessive, or delayed.

Insurers are expected to make a decision within 10 business days of completing their investigation, and in most cases within four months of the claim being lodged

You can find a full list of the insurer’s obligations and your rights during an insurance investigation in the General Insurance Code of Practice (section 15). 

What If My Insurance Claim Is Rejected?

If your insurance claim is rejected unfairly because of alleged fraud:

• Ask for written reasons and copies of the evidence the insurer relied on.
• Review whether the decision is supported by strong evidence or simply assumptions.
• If you disagree, lodge a complaint with your insurer’s internal dispute resolution team.

If still unresolved, escalate the complaint to the Australian Financial Complaints Authority (AFCA), which provides free dispute resolution.