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Dishonest applications for auto insurance in U.K. on the rise: ABI


August 17, 2015   by Canadian Underwriter


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Attempted dishonest applications for motor insurance in the United Kingdom are on the rise, notes the Association of British Insurers (ABI), reporting Friday that its research shows there was 18% more such attempts in 2014 than in 2013.

Insurers uncovered 212,000 attempted dishonest applications for motor insurance in 2014, or a little more than 4,000 weekly

ABI research shows that insurers uncovered 212,000 attempted dishonest applications for motor insurance in 2014, equivalent to a little more than 4,000 weekly, notes an association statement issued last Friday.

ABI reports that common lies exposed included “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”).

“Thousands of motorists are paying a high price, in some cases driving illegally, by cutting corners when buying motor insurance,” notes the statement.

ABI advises motorists to be on guard for these “ghost broking” scams – some of which operate through professional-looking websites – in which “illegal insurance advisers selling bogus motor insurance policies result in innocent motorists driving illegally without valid motor insurance, facing prosecution and having their vehicle seized and crushed.”

The Insurance Fraud Bureau – which manages cross-industry, large-scale ghost broker investigations – is currently dealing with 26 cases of ghost broking fraud, ABI reports.

“Insurers recognize 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,” Mark Allen, the ABI’s fraud and financial crime manager, notes in the statement.

“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,” Allen continues.

Among other things, to get the best value and legal motor insurance deal, ABI suggests that motorists shop around (motor insurance is a very competitive market); lower risk (such as keep the vehicle garaged/on a driveway overnight or get a telematics-based policy); and opt for a higher voluntary policy excess (the higher the amount of any claim paid by the motorist, the lower the premium).