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3,500 fraudulent insurance applications each week

3,500 fraudulent insurance applications each week

Category: Car insurance

Updated: 18/09/2014
First Published: 18/09/2014

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

While the majority of motorists are honest when it comes to their car insurance application, there are still those that try to beat the system. Just how many may surprise you: according to figures from the Association of British Insurers (ABI), 180,675 motorists put forward fraudulent applications last year.

Roughly, this means that 3,500 people per week – or 50 people day – either all-out lie or deliberately fail to disclose full information when applying for their car insurance, and it's costing honest motorists a lot of money. On average, it adds an extra £50 to every household's annual insurance bill, and that's a sum that people will surely begrudge paying.

So, just what are people doing when they're making fraudulent applications? Well, common examples include people failing to disclose previous claims or unspent motoring convictions, while the ABI even found examples of people trying to use an alias to buy cover. It's all for the sole aim of getting cheaper insurance premiums, but considering it's actually bulking up the cost of policies, it's a price that everyone's paying.

It's clearly a widespread problem, and is something the ABI – and the industry as a whole – is committed to tackling. The MyLicence initiative is just one measure being introduced, a plan designed to ensure the insurance industry can obtain driver information (such as motoring convictions and penalty points) directly from the Driver and Vehicle Licensing Agency (DVLA), so there's less opportunity for motorists to try and cover up their past.

Aidan Kerr, ABI's assistant director and head of fraud, commented: "While insurers know that innocent mistakes and oversights happen, they are also aware that some people think that being less than honest is the way to get cheaper cover, when the way to get the best deal is to play it straight with the insurer.

"Industry initiatives, such as the Insurance Fraud Register, the Insurance Fraud Enforcement Department, and the soon to be available MyLicence initiative that will address non-disclosure of motoring offences, will make it harder than ever to deceive to try and get cheaper motor cover."

The issue of fraudulent applications was just one thing scheduled to be discussed at yesterday's ABI Fraud Conference, where industry professionals got together to debate the latest developments in tackling the problem and, hopefully, ensure honest drivers don't have to foot the bill of fraudsters. While the outcomes have yet to be revealed, there is something you can do to cut the cost of insurance in the meantime – shop around!

The industry as a whole may be bearing the brunt of fraudsters, but that doesn't mean you won't be able to find some good deals. Compare the market, haggle a bit and, above all, be honest in your application, and you can be sure you're getting the policy that meets your needs and your budget.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.