Cutting corners to get cheaper motor insurance backfiring on thousands of motorists warns the ABI
13 August 2015
- Over 4,000 fraudulent motor insurance applications uncovered every week.
- Motorists warned that ‘Ghost broking’ scams could leave them driving illegally without valid insurance.
- No need to risk driving illegally when it is so easy to shop around to get the best deals.
Thousands of motorists are paying a high price, in some cases driving illegally, by cutting corners when buying motor insurance according to latest figures out today from the ABI (Association of British Insurers).
ABI research shows that in 2014 insurers uncovered 212,000 attempted dishonest applications for motor insurance, up 18% on 2013 and equivalent to just over 4,000 every week.
Common lies exposed include ‘forgetting’ to disclose previous claims or unspent convictions when asked, giving a false address or post code for a lower risk area, and parents insuring in their name a vehicle being mainly driven by their son or daughter (commonly known as ‘fronting’). Last year over 1,500 reports to the Insurance Fraud Bureau’s ‘Cheatline’ related to motor insurance application fraud- nearly a quarter of the total calls received.
The Insurance Fraud Bureau (IFB), who manage cross-industry, large scale ghost broker investigations, is currently dealing with 26 cases of ghost broking fraud.
Mark Allen, the ABI’s Fraud and Financial Crime Manager, said:
Mark Allen"Insurers recognise that innocent mistakes and oversights happen. But anyone lying to get cheaper motor insurance, or tempted by cheap insurance offers without first checking that they are genuine, risks driving illegally. The consequences include getting a criminal record and a massive financial headache if found to be at fault for a crash. The risks are just not worth it – especially when you can shop around for the right policy at the lowest price.
"Industry initiatives, such as the Insurance Fraud Register, MyLicence that allows insurers to check for any motoring offences, and the work of the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department in tackling ghost brokers are helping to reduce the scope for insurance application fraud."