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Bogus Motor Insurance Claims Rise

Posted on by advancedcheck

The Association of British Insurers’ reports that in 2011, 7% of all motor insurance claims were fraudulent compared to 5% in 2010. This increase can be attributed to a rise in phantom passengers and fake injuries.

To tackle fraud in the insurance sector the Insurance Fraud Register has been setup. The register is a database of all known insurance fraudsters, helping insurance companies to identify bogus claims and fraudsters.

As well as causing a hike in premiums for everyone, spurious claims make it tougher for genuine cases to be recognised and adequately compensated.

Much easier to establish in the event of a claim, is the status of a driver’s Driving Licence. Increasingly, DVLA records are checked by insurers and the findings make interesting reading.

Whatever draws the underwriter’s eye to a particular case remains a trade secret but you can imagine that one or two pieces of the jigsaw ill-fitting would give rise to further investigation.

Inconsistencies in Driving Licence status in one insurer’s experience were present in 12% of cases. However a new sample pulled for inspection, using Driving Licence checking specialists and DVLA-accessed data, raised questions in some 40% of claims sampled over a two month period.

Some variations were fairly “innocent” albeit they were technically breaches of both Driving Licence and insurance practice; 3 points creeping onto a licence but the insurer was not told or an old address was still being used, well past a move date.

The address issue in itself may not seem like a hanging offense but if a notice of endorsement sent by the DVLA is not received, and their reminder is apparently ignored too, DVLA can and will revoke a Driving Licence.

Around 42,000 were revoked in 2010. These people could have been driving unlicensed and therefore uninsured.

Fleet policies are generally more flexible than personal insurance policies when it comes to reporting (say) 3 or even 6 fixed penalty points. But no policy allows for a wise guy handing in an older version or duplicate to his or her boss to hide convictions; likewise fake or expired Driving Licences.

One web-based insurer tracking online applications was interested to see the extent to which shoppers would play around with variations in postcode, driving experience and penalty points to get a better quote.

Were these “surfers” simply correcting original entry errors or were they making false declarations to get a better price? Their fiddle will promptly be given the elbow if it comes to the crunch and they are found fibbing.

Safeguarding against genuine oversight while mitigating the risk of being duped by a dodgy driver is easy for responsible organisations. Extremely competitive terms and an easy to use reporting system is available from AdvancedCheck. Details are drawn from DVLA records, presenting results on a secure, password-protected web system that customers can access 24/7. There is no software fee – everything is included in the flat fee.

Contact us for a quote using our online form or on 0141 354 8854

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