The credit crunch has increased the amount of false claims made on car insurance policies, many of them car related. Industry insiders estimate that the total amount of bogus claims totals £1.6 billion a year which goes on to directly affect honest policy holders.
False car crash claims have soared over the past year with Norwich Union estimating the total cost to above board motorists at £60 extra for their premiums.
Britons have been found to have a tendency to tell the odd fib when taking out car insurance policy, risking invalidating their whole cover according a UK trade body has revealed. The Association of British Insurers (ABI) has revealed that they are discovering an increasing amount of fraud within the insurance industry, many car related, all in an attempt to keep premiums low.
Common practices amongst fraudsters include failure to disclose driving convictions and fronting, a practice where parents add their offspring to their motor insurance cover as an occasional driver, even though they are the main driver.
Truth
Nick Starling, the ABI\’s director of general insurance, said: \”Honesty is the only policy. Cheating to get cheaper insurance puts your cover in jeopardy, with potentially disastrous consequences.
\”Being truthful and shopping around will mean that your insurance delivers when you need it and that you get the best possible deal,\” he added.
Spokesman Malcolm Tarling also stated, \”We\’ve detected more fraud than ever before. Claims have increased by up to 40 per cent in five months – but many of them turn out to be dubious.\”
Fined
Only last month a driver with Norwich Union urged the company to cut his premiums due to him not having claimed for eight years, which they agreed to do. However, after the reduction had taken place and once he had an accident the firm found out he had lied throughout. The fraudster was left with a £50,000 bill after a court process.
This has led to an improved investigation team hired by insurance companies, intent on discovering if a claim is actually valid or not.
More than a third of claims for car insurance are rejected or withdrawn as a result of an extensive investigation made by the insurers, according to Innovation Group.
Investigation
Out all the claims referred to the Innovation group over a six month period, 41% failed to meet the relevant criteria and thus were halted after an investigation. According to their findings, the most common reason for a claim to not be successful was the consumer buckling under the intense psychological interviewing techniques, designed to ascertain if they are being truthful or not.
Nikki Grieve-Top, head of intelligent research and development at Innovation Group, said: \”Throughout the interview process claimants are given various \’opt-out\’ points where they can walk away from a claim if it is suspicious. This often happens after one of our investigators cross examines the claim for any inconsistencies, or the claimant simply becomes impossible to contact.\”
Darren
http://www.articlesbase.com/insurance-articles/false-claims-on-car-insurance-policies-on-the-rise-778902.html