RAC Cars News


Fraudulent Vehicle Insurance Applications Reach 495 Per Day

By raccars Published

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Vehicle insurance applications are often treated a little like writing a CV, with applicants glossing over less desirable aspects of their driving career, to show themselves in the best light. Some, however, go further down that road by telling blatant lies in an attempt to reduce their insurance premiums.

Investigations by the Association of British Insurers (ABI), revealed 180,675 fraudulent insurance applications in 2013, which breaks down to 3,475 every week or 495 every day. The ABI has never before undertaken an investigation into fraudulent insurance applications but the phenomenon and solutions to tackling the problem were under discussion at the association's Fraud Conference, held this month, with 200 insurance industry representatives attending.

An insurance application is considered to be fraudulent if the car owner lies or deliberately fails to disclose full information in answer to specific questions. The most common fraudulent claims involve concealing driving convictions and previous insurance claims or overstating an entitlement to a no-claims discount. Other fraudulent applications include giving a false home address in an area with lower crime rates or parents insuring themselves as the main driver on their child's car. Sometimes insurance providers are able to uncover the fraud at the point of applications, but sometimes applicants successfully achieve cheaper cover and their lies are only exposed if they go on to make a claim. While the association accepts that genuine mistakes can be made during an application, it is keen to prevent deliberate fraud by those taking a punt to obtain a cheaper insurance premium.

Cases uncovered by the ABI include a car owner applying for insurance cover under an alias, in an attempt to disguise a poor credit rating. Another applicant neglected to mention four earlier insurance claims and an existing motoring conviction, resulting in a three year prison term. One applicant had made an attempt to physically alter his driving licence to hide previous convictions.

The ABI suggests that up to £50 is added to every insurance policy as a result of fraudulent insurance statements, which is why the agency is pushing for the DVLA to work directly with insurers by releasing motoring conviction information. Drivers would have to supply their driving licence number to insurers upon application, allowing the insurance provider to search the DVLA database, to uncover every applicant's true conviction history in the proposed 'MyLicence' scheme. This would accompany existing insurance industry initiatives, such as the Insurance Fraud Enforcement Department and the Insurance Fraud Register.

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