Quarter of polled U.K. policyholders prepared to commit application fraud for cheaper car insurance

Figures released Wednesday by LexisNexis Risk Solutions indicate one in four surveyed insured motorists in the United Kingdom say it’s acceptable to mislead insurers to reduce their car insurance premiums.

Forty percent of respondents – identified as insured drivers and policy decision-makers – believe the cost of their policy is too high, and many are taking fraudulent measures to reduce the cost, notes a statement from LexisNexis Risk Solutions, a provider of information to help predict, assess and manage risk.

The poll carried out on behalf of LexisNexis by Consumer Intelligence involved 951 adults living in the U.K. Fieldwork was done June 21-26, 2013.

In all, 25% of those polled report that they think some omission or adjustment of information is acceptable in order to reduce premiums when applying for motor insurance, LexisNexis reports.

Slightly more than that, 29%, admit to “fronting” their policy by naming someone other than the person who will drive the car the most. This decision is influenced by a number of factors, including who has the main income, noted by 25% of respondents; a better driving record, cited by 12%; or who has historically had a lower cost policy, reported by 11%.

“Whilst a quarter of people think it is acceptable to omit or adjust information when applying for car insurance, the majority recognize that this is unacceptable behaviour,” Bill McCarthy, managing director, U.K., Insurance for LexisNexis, notes in the statement.

“One solution for insurers to help address consumers who are willing to mislead is to verify that the information that consumers are telling them is correct through smart use of data verification and analytics,” thereby helping insurers to underwrite risk more accurately, McCarthy suggests.

Some consumers may not even realize that adjusting or omitting information can constitute fraud. “This is a risk for both parties – consumers could find themselves without cover in the event of an accident and insurers can find themselves exposed to unforeseen risk,” McCarthy cautions.

Other survey findings include the following:

• 13% report it is acceptable to use someone else’s address when applying for motor insurance;
• 15% say it is acceptable to try to change their number of “no claims discount” years to achieve a better discount; and
• 8% note it is acceptable to exaggerate the severity of a personal injury, such as whiplash, to increase the money paid out.

On the positive side, LexisNexis reports that 64% of respondents are comfortable with a telematics-type of product that would share information about the events leading to a traffic accident to help determine which driver was at fault.