Understanding Insurance Fraud

At FMG, we’re here for the good of the country and preventing fraud helps us deliver on our purpose of a better deal for rural New Zealand.

Insurance fraud affects everyone, not only our members and clients but the rural communities we live in. That’s why we’re focused on preventing insurance fraud before it happens, reducing its impact when it does, and stopping it wherever we find it.

Report suspected insurance fraud

What is insurance fraud

Insurance fraud occurs when someone deliberately provides false or misleading information to their insurer in support of a claim to gain a benefit they’re not entitled to. This includes situations where a person makes a claim using information they know isn’t true — or they act carelessly with the truth, ignoring whether the details are accurate or not and that information is used to support their claim.

Types of insurance fraud

Insurance fraud includes anything that misleads an insurer in order obtain financial benefit. All types of insurance fraud can lead to serious repercussions and some examples include:

• Claiming for items that weren’t lost or never owned.
• Exaggerating the value or age of items.
• Falsely claiming who was driving a vehicle to reduce an excess
• Combing multiple events to avoid paying multiple excesses
• Misrepresenting who was involved in an accident to reduce liability.
• Claiming shared items as if they were solely owned.
• Staging a loss such as a burglary or car crash.
• Wilful damage and intentionally damaging or losing property (e.g. breaking a phone to get a newer model or setting fire to a house or vehicle).

Why it matters

Claims costs are the largest component of client premiums. So when fraud goes undetected, it’s effectively subsidised by honest clients. That means everyone pays more — not just the person committing the fraud.

In 2024, insurance fraud in New Zealand was estimated to cost over $995 million by the Insurance Council of New Zealand. These costs include not just false claims, but also the extra time, staff, and investigation resources required to manage them.

Strengthening fraud detection, mitigation, and prevention supports FMG’s purpose of delivering a better deal for rural New Zealand.

It helps protect mutual value and ensures fairness across the board — making sure that our clients aren’t footing the bill for dishonest behaviour.

Consequences of fraud

Being dishonest with an insurer — even if it seems minor — can have serious consequences including:

• Declined claims
• Cancelled policies
• Being potentially flagged on the Insurance Claims Register
• Future insurance becoming harder to obtain
• If house insurance is cancelled mortgages could be put at risk
• Any finance or mortgage held against farms or property could be at risk.
• Police prosecution.

Insurance policies require cooperation and honesty. If you ever feel uncomfortable with a request during a claim, you can raise concerns through our complaints process.

What you can do to prevent insurance fraud

Fraud prevention starts with awareness. Here are a few simple steps you can take to help reduce the risk of insurance fraud.

Reporting suspected insurance fraud

If you suspect any fraudulent behaviour or are aware of someone who is committing insurance fraud, we would appreciate any information that is forthcoming. We treat all reports of fraud seriously and we will investigate matters if fraud is suspected.

Any information provided to us will be handled in accordance with FMG’s Privacy Policy and the Privacy Act 2020. This means your contact details will not be disclosed to a third party or agency unless permitted under the Privacy Act. You can also provide the information without disclosing your contact details.

Fraud can be reported via any of the following confidential channels:

• Our confidential fraud report form below
• FMGInvestigationTeam@fmg.co.nz
• 0800 FMG FRAUD (0800 364 37283)
• FMG Investigation Team - PO Box 1943, Palmerston North Central, Palmerston North 4440
• Anonymously via the Insurance Fraud Bureau of New Zealand.