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New measures to tackle car insurance fraud

New measures to tackle car insurance fraud

Category: Car insurance

Updated: 11/10/2013
First Published: 11/10/2013

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 It is now over 6 months old so the content may be out of date.

A national initiative is being developed in an attempt to cut car insurance application fraud, ensuring honest policyholders don't pay the price of fraudsters trying to get a better deal.

As part of the scheme, insurance customers will have to supply their driving licence number so the insurer can get accurate information about their driving history, including the type of licence held and whether they've got any driving convictions.

The initiative, which is being developed in collaboration between the DVLA, the Department of Transport and the insurance industry (represented by the Association of British Insurers), is intended to remove the opportunity for dishonest policyholders to get cheaper premiums by falsely declaring information.

AA Insurance, one of the firms pledging to be part of the scheme, conducted a survey amongst its members and found that 92% of them would support the move if it cuts down fraud.

Simon Douglas, director of AA Insurance, commented: "[Our survey] shows that drivers are fed up with a fraudulent minority trying to get cheaper insurance by telling lies at their expense.

"Insurance fraud is a serious issue for the insurance industry and is stealing from honest policyholders. Mis-declaring information adds around £15 to the cost of every car insurance policy. [This initiative] could reduce insurance industry costs as well as help keep premiums in check."

The announcement comes at the same time as consumers are being warned about insurance fraud of a different kind.

They're being urged to check their policies carefully to make sure they're not the victim of "ghost broking", with thousands of customers potentially having cover that doesn't actually exist.

Ghost brokers set up insurance websites or adverts solely for the purpose of luring people in with great deals. Customers buy the so-called policy only to find out they're not covered when they have an accident, when they could be charged with driving without insurance or be left with a hefty repair bill.

Police have made several arrests over the last few days and are warning consumers to be vigilant and not get sucked in by deals that seem too good to be true.

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