Risky way Australians are scoring cheaper insurance

Australians are telling fibs to get cheaper insurance deals, but they could face serious consequences. Here are the lies they frequently tell.

Australians are lying in order to score cheaper insurance, and they’ve been warned telling fibs could come with serious consequences.

There are millions of active life insurance policies across the nation, and a recent survey has revealed that one in five consumers told untruths in order to get a better deal.

The poll — in which people could select multiple responses — of 1000 people taken by comparison site Finder found that of those who’d lied, almost one in 10 policyholders had misled their insurer about their smoking status. The same number did not give an accurate account of their mental health.

Insurers are required to make sure the questions they ask customers in regards to their circumstances are clear and specific.

Eight per cent gave false information on the nature of their employment, like not disclosing a dangerous job, while 7 per cent weren’t honest about their alcohol consumption.

Some of those surveyed also said they had lied about pre-existing conditions, and their hobbies, such as whether the took part in extreme sports.

Financial Services Council CEO Sally Loane said the latest count showed there were almost 11 million life insurance policies for death cover, and another 8.8 million providing cover for total and permanent disablement.

Ms Loane said insurers were required to make sure the questions they ask customers in regards to their circumstances were clear and specific, and customers were responsible for the information they provided.

“When answering questions, consumers are advised to answer every question truthfully, accurately and completely. If there’s a financial adviser involved, they also have an important role to play in supporting their clients to provide accurate information,” Ms Loane said.

Many people aren’t honest about alcohol consumption.

She said if a customer was found to have misrepresented details about themselves, it could hurt their chances when making a claim.

“If they have breached their duty (of disclosure), this could have serious impacts to the customer’s insurance claim because insurers are entitled to exercise a remedy that is intended to put the customer and the insurer back to the position had the misrepresentation never occurred,” she said.

“This may result in the claim being declined or a benefit being reduced.”

Finder insurance editor James Martin warned of similar outcomes for those who lie, and warned in serious circumstances, a fibbing policyholder could be sued for insurance fraud.

He urged those who had told untruths to “come clean”.

“It might mean that your policy is cancelled, made more expensive, or there could be no impact at all,” Mr Matin said.