Fraudulent Claims on Car Insurance Policies Push the Price Up

With insurance costs rising and employment uncertainty a continuing issue with many families, it appears people in the UK are considering unlawful methods to reduce the cost of their car insurance premiums.

However, taking such measures could see customers having to pay out more or stop them from being able to get cover in the future if they are caught.

Research has revealed that the number of people being refused claims from their insurers has risen by almost a third in the last six months and is due to people giving false or incorrect details when they take out a policy.

In another recent survey of 1,500 motorists, just 39 per cent said they would not consider giving misleading information if it meant they could lower their car insurance premiums.

There are several ways people make fraudulent claims when applying for an insurance policy. Fronting is a particularly common one and involves an older motorist claiming to drive a car that is mainly driven by a younger, less experienced driver, in order to get a cheaper quote.

One insurance expert said of this, “Young drivers should start earning their own no claims discount as soon as they can by insuring the vehicle in their own name, as it’s a valuable commodity when it comes to buying car insurance. The important thing to remember is that whilst it might be tempting to alter certain details or omit key information, this is treated as fraud by insurers and could result in your policy being invalidated.”

The cost of fraud is a hard one to gauge but almost certainly leads to people being dropped by their insurance company and difficulty in finding new and affordable cover in the future.

Most fraud is discovered when a claim is filed by a customer and this can see them left to pay for any expenses on their own. If a third party was involved, the insurance premium might still have to be settled or legal action might be carried out to cover any third party damages. These expenses will ultimately far out way the savings.
Fraud does not just affect those people that try to get away with it, as the costs incurred by insurance companies are past down to both honest and dishonest road users.

It is estimated that around £30 of every private car policy is added as a result of fraud.

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