10% of claims fraudulent: Insurance Fraud Bureau notes lift in crims staging digger thefts

Diggers and heavy machinery are believed to be taken offshore, as criminals make insurance claims for 'stolen' goods.

About 10% of general insurance claims are believed to be fraudulent, with the industry noticing a rise in fake digger thefts.

The Insurance Council of New Zealand’s Insurance Fraud Bureau estimates general insurers (not life and health insurers) blocked $1.2 billion of fraudulent claims in the four years to 2023.

It’s still collating data for 2024.

Speaking to the Herald, the bureau’s manager, Yvonne Wynyard, said criminals were staging thefts of diggers and other earthworks movers in bids to get insurance payouts for the “stolen” machinery.

She said fraudsters went to great lengths to stage the thefts, cutting fences and turning off CCTV cameras, as well as relying on people overseas to help execute their operations.

“Once you’ve taken such a large vehicle, you’ve got to hide it somewhere. So we suspect they’re going off overseas,” Wynyard said.

“There’s some sort of sophistication there, where there are many elements across the board interacting with these criminals.”

When Wynyard last spoke to the Herald in late-2023, she noted the rise in criminal rings staging car thefts and even crashes.

She said this was still an issue, with criminals “re-birthing” supposedly stolen cars, getting them insured again, and repeating the cycle of faking thefts.

“It’s just a cat and mouse game,” she said, noting Toyota Hilux utes were proving to be particularly popular targets.

Indeed, the Hilux jumped four spots to number six on AMI’s list of most stolen cars in 2024.

AMI said the Hilux’s rise up the ranks indicated its “increasing value, rural and urban appeal, and strong resale value, driven by high demand for its parts”.

The Toyota Aqua and Corolla held the top two spots on the list, followed by the Nissan Tiida, Mazda Demio, and Mazda Atenza.

Wynyard warned exaggerated claims – i.e. spilling coffee on your laptop, but saying your phone was damaged too – were also considered fraudulent.

The bureau noted a doubling in the value of fraudulent claims in 2023, which was the year of Cyclone Gabrielle and the upper North Island floods – two very expensive events for the insurance sector.

Wynyard said the consequences of being snapped committing fraud were such that it wasn’t worth it.

Speaking to the Herald in late-2023, she explained a fraudster could struggle to get insurance cover again. And if they did, it could come at a cost.

This could see them battle to buy a house, as banks require mortgage holders to have insurance.

Wynyard noted the punishment for fraud was “quite severe” and long-lasting.

She explained the bulk of insurance claims made in New Zealand were put on a register, which insurers could access.

If an insurer had reason to believe a claimant was a risk to their business, they would flag it on the register.

“It’s a powerful tool,” Wynyard said.

“If you’re stuck on that, you’re sort of indefinitely on the register as a risk to insurers. You’ll find getting insurance from another insurer is quite hard.”

Wynyard acknowledged insurers didn’t always check the register. So someone could spend years paying premiums, only to run into problems when they finally made a claim.

“Insurers will quite happily cover you until such time you claim, and then they’ll start investigating and looking into your claiming behaviour.”

Jenée Tibshraeny is the Herald‘s Wellington business editor, based in the Parliamentary Press Gallery. She specialises in government and Reserve Bank policymaking, economics and banking.