Written by Scarlett Eadie
In July 2025, a Sydney man was arrested for allegedly staging motor vehicle collisions and submitting multiple false insurance claims. Over the course of 16 staged accidents between 2019 and 2022, he received payouts totalling $390,480. This case highlights the ongoing issue of insurance fraud and how often it can and does go undetected.
According to the Insurance Council of Australia, there are around “$560 million worth of opportunistic motor and property insurance fraud cases each year, with undetected fraud estimated to cost the insurance industry around $400 million a year”.
In a landscape where fraudulent claims continue to slip through the cracks, insurers must remain vigilant and examine claims carefully to identify fraudulent insurance claims. This case prompts a critical question for insurers – once you have identified a possible fraudulent claim, what kind of evidence is required to convince a Court or Tribunal that a claim is fraudulent? A look at some recent AFCA decisions are helpful resources that can guide insurers when navigating these claims.
Case Study One: Allianz Insurance – AFCA Determination (Case No. 12-00-1102528)
On 10 January 2025, the Australian Financial Complaints Authority (AFCA) made a determination involving a complainant who held comprehensive insurance with Allianz Australia Insurance Limited (Allianz). The complainant claimed that their vehicle had been damaged while parked outside their home overnight.
Allianz denied the claim, citing the following reasons:
- the damage was inconsistent with being struck by another vehicle, as alleged;
- the damage appeared more consistent with the vehicle hitting a stationary object, such as a pole, while in motion;
- the complainant’s version of events was not credible; and
- the complainant breached their duty of utmost good faith.
Allianz engaged a forensic engineer who concluded the vehicle had sustained a direct forward impact, inconsistent with being hit while parked. No evidence supported the claim that the vehicle had been damaged outside the complainant’s home. The complainant failed to provide any alternative explanation or evidence contradicting the expert report.
AFCA determined that the complainant had not discharged their responsibility to prove the loss occurred in the manner described. As a result, AFCA ruled in favour of Allianz and upheld the claim denial.
Case Study Two: Hollard Insurance – AFCA Determination (Case No. 12-24-141507)
On 1 May 2025, AFCA issued another determination regarding a complaint against Hollard Insurance Company Pty Ltd (Hollard). The complainant, who held comprehensive insurance, submitted a claim following an alleged collision with a third-party vehicle.
Hollard initially accepted the claim but later denied it after conducting forensic investigations of both vehicles.
Hollard denied the claim on the grounds that:
- no valid claim had been established;
- the complainant was not truthful; and
- the complainant breached their duty of utmost good faith.
AFCA found that Hollard was justified in denying the claim. While the complainant insisted the damage resulted from a single collision, forensic evidence showed the damage was likely caused by two separate impacts at different times.
During interviews, the complainant’s story changed. Initially, they claimed there was only one collision, which matched the third-party driver’s account: they “just felt the one bang and drag.” However, Hollard’s forensic report based on crash data confirmed two distinct collisions, each occurring at different speeds and times. When re-interviewed, the complainant admitted they may have collided more than once but couldn’t remember clearly.
AFCA found the forensic report to be highly persuasive, describing it as “detailed, thorough, logically set out and clear.” Although the complainant challenged the reliability of the report, AFCA noted that they failed to produce their own expert evidence to support their position.
AFCA concluded that, on the balance of probabilities, the damage was caused by two separate incidents, and thus Hollard’s denial of the claim was valid. Because no valid claim had been proven, AFCA did not consider Hollard’s arguments regarding the complainant’s truthfulness or breach of duty.
Key Takeaways: Proving Insurance Fraud
When an insurer suspects a fraudulent claim, a thorough and methodical investigation is essential. This may involve:
- detailed claim notes and documentation;
- multiple interviews with the insured and possible witnesses;
- site inspections of the alleged loss location; and
- engagement of independent investigators and forensic experts.
Courts and Tribunals are persuaded by credible evidence, such as expert reports and factual inconsistencies in the insured’s account. Ultimately, an insurer must present a more convincing and evidence-backed narrative than the insureds to demonstrate that the claim is likely to be fraudulent.
It is also important to consider the principles from Briginshaw v Briginshaw (1938) 60 CLR 336: “while the standard of proof in civil matters is the balance of probabilities, allegations of fraud require a higher level of persuasion. The more serious the allegation, the stronger and more convincing the evidence must be”. In addition, the case highlights that decision makers are guided by findings of fact based on the evidence before them.
At Ligeti Partners, we work closely with our clients to investigate and respond to suspected insurance fraud across the motor and property sectors. We advocate for our clients on issues such as suspected fraudulent insurance claims in Tribunals and Courts across all jurisdictions in Australia. If you require assistance, please contact our office today.
Should you wish to discuss any of the above, please contact Scarlett Eadie on 02 8047 2886 or any member of the Ligeti Partners team on 03 9947 4500.
