Fraudulent claims resulting in explosion in car insurance prices
Published: 20th October 2010
Category: Statistics & Research
Reader's Rage: [10votes]
Research by the AA has revealed that car insurance prices are rising at one of the highest rate since records began. Moneysupermarket.com, who has extensive experience with insurance firms, understands that this is down to four key trends:
- Increases in fraud claims
- An increasing number of personal injury claims
- The rising number of uninsured drivers
- Increasing number of car thefts.
These trends resulted in a situation where the amount the insurers were paying out was more than they were taking in from customers.
The most disturbing and dangerous statistic uncovered is the rising number of crash for cash drivers on the road, with Money Supermarket research suggesting that one in twenty young drivers have actually staged an accident in order to make a claim, which amounts to 1.7 million drivers. This is not only one of the main contributors behind the rising car insurance costs for the average road user, costing the insurance industry £16 million per week, but also remarkably dangerous.
The insurance industry has classified three separate types of insurance fraud which are included in these statistics:
- Staged- two vehicles deliberately crash into each other in order to claim off their insurance firms.
- Contrived- When someone fabricates a story about a motoring accident which never took place.
- Induced- a deliberate action by one motorist to force another innocent motorist into crashing into them. This can include braking suddenly to result in them being hit from behind (which would be seen as the driver behind being seen to be at fault).
According to Steve Sweeney, head of car insurance at Moneysupermarket.com, motorists who fraudulent claim on their insurance are at risk of being black listed by insurers should they be caught, which will result in many insurers refusing to offer you cover, and those that do will offer you significantly higher price.
It has yet to be seen whether the publicity surrounding the ‘crash for cash’ story which has been heavily featured in the media of late will help reduce the number of fraudulent claims being made. The only hope is that people will realise that insurance firms are now on the look out for fraudulent claims and realise the potential tragic consequences their actions could have for both themselves and others.
Information sourced in part or in full from: Money Supermarket.com
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