Media release 26 June 2025
The Insurance & Financial Services Ombudsman Scheme (IFSO Scheme) is reminding consumers that honesty is essential when making an insurance claim. This follows a recent case where a couple’s car insurance claim was declined, and their policies cancelled, after they made false statements about how the damage occurred.
Mr and Mrs Owen* made an insurance claim, saying their car had been damaged when Mr Owen drove it into a fence at a friend’s house. They said the front driver’s side and left passenger door were damaged.
However, the repairer engaged to assess and repair the car told the insurer the damage appeared to be from three separate incidents: the right front corner, the left sill area, and the tailgate.
The insurer asked Mr Owen to provide a signed statement and diagram of how the damage occurred. He said he had hit bricks on the left-hand side of the driveway, then the front right side of the car, and finally the letterbox, which caused the dent in the back. Mrs Owen also sent photos of the damage, including the dent in the boot.
When asked for a photo of the letterbox, Mrs Owen said she felt like she was being investigated and insisted she was telling the truth.
The insurer appointed an investigator who reviewed the photos of the scene and noted “there [is] no sign of a letterbox being in a position that the insured would have been able to collide with”.
Mrs Owen continued to assert that Mr Owen backed into the letterbox, but that he didn’t hit it hard so there was no damage to the letterbox. When looking at a Google image of the property with the insurer (which showed there was no letterbox), Mrs Owen said “it actually wasn’t the letterbox he hit… he somehow hit the back I don’t know how he did it but he did do it”.
Later the same day, Mrs Owen admitted that the damage to the back of the car didn’t happen at the friend’s house, but in a supermarket carpark a few days later.
The insurer declined the claim and cancelled the couple’s policies.
Mrs Owen complained to the IFSO Scheme, saying she had believed the damage happened at the same time and apologised when she found out otherwise. She wanted an apology and compensation for the distress caused.
However, after looking into the complaint, the IFSO Scheme made a decision in the insurer’s favour.
Karen Stevens, Insurance & Financial Services Ombudsman, says insurers are entitled to decline a claim and cancel a policy if a false statement is made.
“The test for a false statement is whether the statement was wrong, whether the person knew it was wrong when they made it, and whether it was relevant to the claim,” she says.
“Even if Mrs Owen had not known how the damage to the back of the vehicle occurred, as the driver of the vehicle, Mr Owen knew when and how the damage occurred. He knowingly gave a false statement when he claimed he “dented the back when he hit their letterbox.”
“The false statement was relevant to the claim, because it indicated Mr Owen had attempted to include damage from another event in the claim, to avoid paying a separate policy excess.”
“This was enough for the insurer to decline the claim and cancel the policies,” says Stevens.
Stevens says the case is a reminder that even so-called “little white lies” can have serious long-term consequences, and that trying to include unrelated damage in a claim to avoid paying another excess is just not worth the risk of having no insurance at all.
“Last year we had a case where a man was flagged on the Insurance Claims Register (ICR) after he lied to his insurer about his car being damaged in a flood. This left him not only uninsured but also facing the imminent risk of losing his house because his mortgage was dependent on having insurance,” says Stevens.
“Honesty is always the best policy,” she says.
The IFSO Scheme resolves complaints about insurance and financial services, and its service is free for consumers. People can make a complaint at www.ifso.nz or by calling 0800 888 202.
*Names have been changed
ENDS
Media contact:
Sarah Smythe
IFSO Scheme Communications Manager
sarah@ifso.nz
021 292 4036