Insurance fraud is emerging as a major issue in earthquake-ravaged Christchurch as some property owners try to take advantage of the disaster.

Police are already dealing with several cases from the top end where people are accused of false or inflated claims to the taxpayer-funded Earthquake Commission (EQC), as well as one where a private insurer paid out $1.5 million to an alleged fraud-ster.

"I suspect we will get quite a few more," said Detective Senior Sergeant John Rae, who heads the Christchurch police fraud squad.

"This is all new ground to us, but a paper done on overseas earthquakes has suggested that one in 10 claims has got some fraudulent element to it. Obviously that goes from someone adding a nought to a figure, right up to the [most] serious stuff."


An EQC spokesman said that since October, additional inquiries it had made into dubious claims had resulted in nearly $1.1 million worth of "incorrect entitlements" not being paid out.

"Unfortunately, in some instances, this may be deliberate dishonesty. EQC takes this extremely seriously and will have no hesitation in forwarding such cases to the police to lay charges."

The Insurance Council of New Zealand, representing private insurers, says it will not tolerate fraud, and is using various methods to identify it and refer it to police.

Three cases of alleged insurance fraud are before the courts in Canterbury, including a 41-year-old woman facing a raft of charges over allegedly forged and altered documents relating to properties she owned in Christchurch.