The AA has said the typical price of a motor insurance quote has increased dramatically because of the growing number of fraudulent insurance claims. In the last 13 weeks vehicle insurance premiums have gone up by a record 11.5%. A typical comprehensive car insurance premium has risen by an incredible 30.9% over the last 12 months.
According to industry experts, during the past 12 months, for every £100 the insurers take in premiums, they have been paying out £122. Insurance companies are getting much better at identifying fraud and they are also bringing in new technology which will help them fight the fraudulent applications. Anyone who is caught making a fraudulent application will find it very difficult to find an insurer willing to take them in the future, and if they do, the premiums will more than likely reflect their bad history.
Simon Douglas, director at the AA, said “The growth of price comparison sites has encouraged fraud, although most people wouldn’t see it as such. It is much easier to manipulate information on a computer screen to find the cheapest price – for example, by changing the facts about past driving experience, than attempting to do so in a conversation with insurance sales staff.”
But Paul Lawler, spokesman for Moneysupermarket.com, disputed these claims saying “I cannot accept that it is any easier to commit fraud on a price comparison website than anywhere else. After all, what is stopping people from entering in fraudulent information into their own website? Or providing that information over the phone?
Most insurance comparison websites will monitor each and every application made by a user and the details are kept on record. If they then try to reapply with very different information it will be flagged up. Comparison websites do not deny there is a problem with fraud in the insurance market. They claim it is the rising number of false claims that are the real problem and point to the proliferation of personal injury companies as an indication of how many people are claiming for injuries in car accidents