UK car insurance fraud explained
Car insurance fraud is nothing new in the UK and if you don't want to become a victim of it make sure to learn some basics.
UK car insurance fraud is a type of problem that involves all insurance users, not just the person involved in a fraudulent scheme as a victim. Car insurance fraud always involves additional claims within the pool and when there are more claims filed the insurance company has to increase premiums for all their customers in order to transfer the risks and costs of those claims settled. So in the end it's us, the usual customers, who are paying for every fraudulent claim settled by our providers. But what is fraud in the first place and what are the most widespread forms of auto insurance fraud in the UK?
THE TOP TEN AREAS FOR SUSPICIOUS CLAIMS
Car insurance fraud in general refers to any activity that leads to obtaining money from the insurance company in an illegitimate manner. Car insurance fraud can involve vehicle damage, personal injury or both. There are many types of car insurance fraud out there and the schemes tend to evolve with time as insurance companies discover previous methods and make everything to prevent them. And while fraudsters think of new ways to make their scam schemes work simple drivers have to deal with increased costs and robust claim review just because a small group of people is exploiting car insurance possibilities.
The most common type of UK car insurance fraud in the last couple of years was non-disclosure of claims or convictions. There's a reason to do that because with every claim filed and every additional entry to the driving record the car owner is charged with higher premiums. And taking the overall dramatic increase in car insurance rates just over the last year it's evident that a lot of drivers are willing to cut their rates at all costs. Another widespread practice is "fronting", which involves a lower risk driver such as a parent or a car owner with good driving record to be written as the main policyholder for a car whose main user is a high risk driver. It's yet another way to pay those suits just a little bit less money.
A whole different story is intended accident or damage set-up. This type of fraud is more aggressive and involves targeted action against everyday car owners. There are different types of this fraud category but they often involve a set-up accident where you are at fault and have to pay for the damage or injuries you have supposedly caused. Another version is having an accident with a driver whose insurance policy is issued using stolen identity.
What's the best advice regarding car insurance fraud? First of all, don't think of doing it yourself because if you get caught it will cost you way more than you've managed to save or earn through fraud. And if you don't want to become a victim of it just keep your eyes on the road for any suspicious drivers around you and try to avoid any possible accidents.