Motor insurance fraud costing honest drivers extra £50 on their annual insurance bill.
Some 180,675 fraudulent applications for motor insurance were detected in 2013, according to new figures from the Association of British Insurers (ABI).
That's the equivalent of nearly 3,500 every week or 500 a day.
These claims were exposed as lies by the insurer when a person applied for a policy, or after they had obtained cover and had gone on to make a claim.
The ABI has tallied the figures for the first time in order to highlight the full extent of fraudulent applications, ahead of its Fraud Conference in London today.
It estimates that motor insurance fraud is adding £50 to the average annual insurance bill.
The lies
Applications were deemed as fraudulent by insurers if someone suspected of lying failed to provide, when challenged, any further information to support what they claimed or suddenly withdrew their application with no credible explanation.
The most common cases involved drivers claiming their ‘no claims bonus’ was longer than it really was or trying to cover up past driving convictions.
Specific examples uncovered by the ABI included a driver with a poor credit rating trying to use an alias to buy motor cover and a motorist who attempted to doctor his driving licence to remove driving convictions.
In another case, an applicant failed to disclose four previous claims and an unspent motoring conviction, which led to a three-year prison sentence.
Aidan Kerr, the ABI’s Head of Fraud, said: “While insurers know that innocent mistakes and oversights happen, they are also aware that some people think that being less than honest is the way to get cheaper cover, when the way to get the best deal is to play it straight with the insurer."
Stamping out motor insurance fraud
Tackling motor insurance application fraud is one of the topics being discussed today at the ABI’s Fraud Conference in London today.
It's hoped industry initiatives like the soon to launch MyLicence will go some way to stamp out non-disclosure of motoring offences and make it harder for drivers to deceive insurers.
MyLicence will use information from the DVLA to remove the opportunity to be inaccurate, either accidentally or on purpose, by gathering driver information such as motoring convictions and penalty points automatically.
It’s estimated the new driver database will save honest customers an average of £15 on the cost of their motor insurance.
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