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How to avoid car insurance fraud

Some of the stories would be funny if they did not impact on us so acutely. Take the case of a claimant who informed their insurer they suffered back injuries from a fall in a nightclub.

The claim was rejected when a search on Facebook uncovered pictures of the person in question performing gymnastics and training for a charity run.

And then there was the man who claimed for a lost engagement ring. Investigations led to the man's ex-partner who said she had not received a ring and had not even been engaged. The same day the revelation was unearthed, the man said he had suddenly found the ring.

There was even an injury claim from someone who had fallen over a wall. It later emerged there was no wall at the scene of the alleged incident.

These are the fraudulent claims which are exposed and then rejected. And, according to the Association of British Insurers (ABI), which recently published these stories, 2,500 fraudulent insurance claims are uncovered every week, and the number being uncovered seems to be rising each year.

Nick Starling, the ABI's director of general insurance and health said: "Insurers are working harder than ever to protect honest customers against fraud."

"The savings made by weeding out fraudulent claims would otherwise end up being paid for by honest policyholders through higher premiums."

But despite this impressive headway into weeding out the cheats, insurance fraud is still a very big problem.

In fact, it is estimated insurance fraud is costs £2billion a year. And this adds, on average, an additional £44 per year to the insurance bill of every UK policyholder, says the ABI.

But while being caught out exaggerating or faking a claim will mark you out as a fraud to insurers and get you into very hot water, simply 'cutting a corner' to reduce your premiums is just as dangerous.

It's tempting with premiums – particularly for car insurance – to tweak some of the details of our circumstances in a bid to save ourselves some money.

And thousands of motorists, the ABI revealed earlier this year, are putting their motor insurance at risk as well as driving illegally by giving false information or failing to disclose important facts.

Some of these incidents of being economical with the truth might seem innocent, and you might even think they are acceptable 'money saving' methods. However, this is sadly not the case.

Take a well-documented 'corner cutter' known as fronting. This is where a parent identifies themselves as the named driver for a vehicle, says their son or daughter is an occasional driver but, in fact, their child is the main driver.

According to research by the ABI over half of motorists said they would not rule out fronting – despite the fact it is considered to be fraud, and could invalidate their insurance and lead to a criminal conviction.

Now the message to anyone tempted to commit fraud – however trivial it may seem – is there is no escape. Plans are afoot to clampdown on the fraudsters through a special police force and a 'blacklist' of known insurance cheats.

The new force, the first ever police insurance fraud investigation team will be launched at the same time as the national Insurance Fraud Register.

 

Richard Anthony Oakes, Sharon Linda Oakes & Ashley Burton trading as Oakes Insurance Consultants are
authorised and regulated by the Financial Services Authority. Number 307170

Registered office: Oakes House, Derby Road, Long Eaton, Nottingham NG10 1PD