Car Insurance fraud climbs to 3475 sham applications a week ñ New Initiatives set to dampen duplicitous activity
A number of Britons have purported to pull the wool over their insurerís eyes as recent figures reveal brokers identify roughly 3500 suspect applications a week, made so by motorists carefully tailoring their claims so as to reduce their outlay as much as possible.
It would appear that insurance fraud is not as trouble-free as many households would like to think, as in 2013, the Association of British Insurers (ABI) exposed 180, 675 deceitful drivers seeking to get a better insurance deal. When broken down, this works out at 495 fraudulent applications a day ñ or 3475 per week. As this research marks the first time the scale of fraudulent applications pertaining to car insurance has been scrutinised, the number of offenders cannot be compared with years gone by.
Bogus claims were identified by insurers at various points through the application process, and these typically entailed motoristsí barefacedly lying about key pieces of information or attempting to conceal past misdemeanours, such as unaddressed driving-related convictions.
Reasons for such staggering amounts of duplicitous applications include the harshness of the economic climate in recent times, increased costs of vehicle maintenance and general household upkeep, a perceived lack of off-putting sanctions and the publicís general view that insurance fraud does not directly negatively impact upon fellow citizens.
However, this last factor can be firmly discounted, as the more fraudulent applications that are processed, the higher the cost of the majority of motoristsí premiums, and with over £2bn worth of insurance fraud going under the radar per year, policyholderís can expect their pockets to be thinned in coming years if the issue is not successfully remedied.
Motoristsí Mendacious Methods
The fraudulent methods deployed by motorists in their attempts to secure cheaper deals are varied in format but have manifested themselves across the regions of the UK.
A frequently used technique by shifty drivers was the covering-up of past convictions or exaggerated lengths of ëno claims bonusí terms. Many drivers sought to suppress their place of residence for fear of their insurance proving costlier due to the repute of their neighbourhood, with some going as far as to provide fake names and totally fantastical addresses in order to hide poor credit ratings.
Other instances of fraud made out by the ABI, which can be seen as closer to home, involve parents posing as the primary drivers of their childís car in order to drive down insurance costs. Described as ëfrontingí, this technique can be seen across society, indicating the lack of heed paid to the criminality of insurance fraud, when compared with starker corruption such as outright theft.
However the reality is that insurers have been cracking down on perpetrators, a process which has intensified recently, and a cluster of policyholders have been handed jail terms due to their failed fraudulent ventures. The ABI found that 1 in 5 motorists understate their driving convictions, whether their actions are rooted in naivety or dishonesty is unclear, however that 20% can be viewed as suspicious can be seen as enough cause for concern.
ABI ëMyLicenceí programme
Working in tandem with the Driving & Vehicle Licensing Agency (DVLA), and an assortment of other organisations, the ABI have produced a programme called MyLicence, which allows the insurance sector to access motoristsí history straight from the DVLA.
As such when applications are being considered, the ABI can accurately ascertain an applicantís criminal history & former motoring misdemeanours, and as such, can set premiums at the appropriate rate, saving honest, tax-paying car owners cash whilst preventing corrupt policyholders from profiting from fraudulent activity.
As such, the multitude of consumers comparing car insurance quotes online could be asked more frequently to produce their driving licence number for purposes of authorisation. This will then be cross-checked with the DVLAís data, and any lies will be nipped in the bud at this stage. The average amount expected to be saved for every policyholder stands at £15.
With modern insurance fraud being carried out by more sinister corners of society, including organised gangs and other vindictive third parties, its growing presence can no longer be overlooked. In April 2014, Aviva noted a steep increase in the amount of insurance fraud, especially a swelling in fraudulent whiplash claims.
Aidan Kerr, assistant director & head of fraud at ABI, pointed to the dampening effects initiatives such as MyLicence would have on the amount of car insurance fraud.
He said: ”While insurers know that innocent mistakes and oversights do happen, they are also aware that some people think that being less than honest is a way to get cheaper cover, when the way to get the best deal is to play it straight with the insurer.”
With the initiation of the Insurance Fraud Registerin 2013ñ a flagship census of all known fraud-related perpetrators – the future looks bleak for any scammers seeking to perversely profit from the car insurance sector.