Fraudulent Claims

The rule relating to fraudulent insurance claims is a special common law rule. Even when the policy is silent about the remedy for fraudulent claims the rule still applies. This chapter examines the definition of fraud, the state of mind of the assured, materiality, the extension of the rules to the use of fraudulent means and devices by the assured, the juridical basis of the rule and the link between the duty of good faith and fraudulent claims, to understand under what circumstances the special common law rule. It explores the proof of dishonesty and materiality for the insurer to defend the claim. The chapter reveals that linking the fraudulent claims with the duty of good faith set out by section 17 of the Marine Insurance Act (MIA) 1906 have many uncertainties. The Government Insurance Bill 2014 does not suggest any reform or clarification in terms of breach of the post-contractual duty of good faith.