180,000 'lied over motor insurance'

NEARLY 3,500 cases of motorists lying on their applications for insurance or deliberately leaving relevant information off them are being uncovered by insurers each week, new figures reveal.

Some 180,675 attempts to make fraudulent applications for motor insurance as people tried to get cheaper cover than they were entitled to were detected last year, equating to around 3,475 incidents a week, according to data released by the Association of British Insurers (ABI).

These claims were exposed as lies by the insurer either at the point when the person applied for a policy, or after they had obtained cover and had gone on to make a claim.

Common cases involved people deliberately trying to pull the wool over insurers' eyes by pretending their "no claims bonus" was longer than it really was or trying to cover up past driving convictions.

Some cases involved drivers giving a false name or lying about where they live, such as pretending their car was being kept in a more crime-free area.

Other fraudulent applications involved "fronting", where for example a parent pretends to be the main driver of a car when in reality it is their child, who is more expensive to insure.

The ABI, which has totted up the figures for the first time in order to highlight the full extent of fraudulent applications, estimates that such frauds add around £50 to every household's annual insurance bill.

Fraudulent applications it has seen include a motorist with a poor credit rating who tried to use an alias to buy motor cover and a driver who had attempted to alter his driving licence in order to remove previous driving convictions.

In another case, an applicant failed to disclose four previous claims and an unspent motoring conviction, which led to that person receiving a three-year prison sentence, the ABI said.

According to industry estimates, nearly one in five policyholders under-declares the number of motoring convictions they have, including those doing so maliciously in order to pay a lower premium as well as those doing so innocently because they got confused or simply forgot.

Applications were defined as being fraudulent by insurers if someone suspected of lying failed to provide, when challenged, any further information to back up what they were claiming or suddenly withdrew their application with no credible explanation.

They were also classed as fraudulent if the applicant did not reply to the insurer's attempts to get in touch or, without a decent explanation, accepted a substantially lower settlement for an insurance claim or a much higher insurance premium.

The ABI has been working with various bodies to develop a data-sharing programme called MyLicence, to enable the industry to obtain driver information such as motoring convictions and penalty points directly from the Driver and Vehicle Licensing Agency (DVLA).

Aidan Kerr, ABI's assistant director, head of fraud, said initiatives like the "soon to be available" MyLicence will make it harder for people to try to deceive firms.

He said: "While insurers know that innocent mistakes and oversights do happen, they are also aware that some people think that being less than honest is a way to get cheaper cover, when the way to get the best deal is to play it straight with the insurer."

By Press Association reporters