Motor Insurance Fraud Increasing Cost of Cover

MotorTrader May 15, 2016Latest News

crash for cashAt some point in our lives we all need to take out an insurance policy. We do so due to the investment we make in a product and so as to recover the costs should anything bad occur. Or in the worst of situations, to enable us to ensure we are covered against third party liabilities.

Unfortunately some people take advantage of the cover and seek to benefit from cash windfalls to either make money on a regular basis or to alleviate a debt situation. Debt which may have arisen out of a car purchase and falling behind on loan payments.

Other people are simply associated with criminal gangs who make hundreds of thousands of pounds a year from the fallout of crash for cash and other scams. The resulting effect is higher premiums for everybody with a policy.

Crash For Cash And Insurance Scams In The News Daily

Fraud CostsHardly a day has gone by in the last few years without Crash for Cash hitting the headlines. Something the motor trade industry and authorities at large have been doing their level best to cut down on, with relative success.

However the opportunity to scam a policy lays within all of us and the latest news while disturbing, shows it can pop into any of our minds at any point in time.

Anthony Murray, from Orrell near Wigan recently helped stage an arson attack on his car which resulted in two other vehicles also being set alight. A fireman, he arranged for a hoax call out to take place, during which his car situated at the fire station would be burned by an accomplice.

At the same time however, two other vehicles, another car and a Fire Brigade Van was also set alight causing many more thousands of pounds in damage and of course, two additional claims on personal and business insurance.

The effects of this will be an adjustment on premiums in the area, as well as nationally. Mr Murray had fallen behind on payments and was in debt to the full value of his car.

Cars naturally depreciate by 30% after purchase, so to necessitate full recovery of monies he felt the need to stage an arson attack and take advantage of additional policies he had taken out on both the car and financial payments. His car going up in smoke would have seen the policies payout and debts paid.

The Different Fraud Groups And Protections

Crash for Cash IFBThe fact he was brought to justice now means premiums won’t need to be adjusted and that monies will be recovered. Until the next time. Which is why the UK has a suite of fraud groups to help the more honest motorists keep their policy costs down and help keep motor trade insurance costs lower in general.

Many insurers and brokers now utilise services and supply information to the Claims and Underwriting Exchange Register (CUE), Motor Insurance Anti-fraud and Theft Register (MIAFTR) and the Association of British Insurers (ABI).

All of these associations and their collaborations seek to find the source of criminal claims such as crash for cash and a regular pattern of criminal activity and ensure the authorities are notified of any future applications for cover and that they are blocked at the quote stage.

Indeed the BGL Group and others are setting up Data Hubs, from which they can ascertain whether the person applying for cover is going to be a risk to the provider, over and above any naturally occurring claim. Thus ruling out any cover in the first place and minimising any future criminal activity.

Naturally providers wish to take on risk in return for your monthly premiums. However risk when it comes to criminal behaviour by the policy holder and those seeking to implement fraud, is not a risk but a crime.

And these crimes all add up and add weight to higher premiums across the country and in the areas they take place. The independent Insurance Fraud Bureau (IFB) also works with the public, authorities and insurers in taking tips and reducing fraud to help reduce the cost of cover nationally.

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