Leading online insurance broker exposes the top five insurance scams that increase insurance premium rates each year

Leading online insurance broker, InsureYourMotor.com is exposing the top five motor insurance scams that increase premium rates and contribute to the staggering 1 billion pounds worth of fraudulent claims made each year to insurance companies. InsureYourMotor.com reveals that the top five motor insurance scams are: • The cover note scam provides a ‘get out of jail free’ card to many young drivers who cannot get insured on high performance because of their age. These stolen insurance cover notes can be easily bought on the black market for £1000. • The ‘Whiplash’ scam provides another opportunity to con insurance companies. One person suffers a minor crash normally administered by a friend and then claims there where 4 or 5 other people in the vehicle that have suffered whiplash. The average whiplash compensation payment is £7000. • The cancelled insurance scam equates to approximately 6 million cancelled policies a year and costs the motor insurance industry around 24 million each year. Drivers will buy the relevant motor insurance they need for the vehicle to obtain an insurance certificate and purchase a road fund license for the car but will then cancel the insurance policy. • The stolen car scam is one of the most well known motor insurance scams, a driver rings up claiming their car has been stolen then claims on the insurance. It would be staggering to know how many supposed stolen cars have been buried or crushed by a friendly scrap dealer, especially during the 70’s and 80’s when this scam was rife. • The stolen credit card scam costs the motor insurance industry millions each year. Nearly 2% of motor insurance transactions are made from illegally borrowed or stolen credit cards that amounts to 6 million fraudulent purchases of insurance policies each year. David Harlow, Managing Director of InsureYourMotor.com comments: “ InsureYourMotor.com has recently fallen foul to the stolen credit card scam which left us £2500 out of pocket, the customer called to cancel his policy and requested the premium to be returned to him as a bankers draft. I was later informed that the credit card that paid for the insurance had been stolen. Motor insurance companies want to offer the best deals but are victims to these scams making it almost impossible to reduce premiums rates. However, insurance companies are putting strong measures in place like the motor insurance database that can detect if someone makes more than one whiplash claim in a year and voice analysis to catch out these criminals that are responsible for these high premium rates.” A survey carried out last year by the Association of British Insurers confirmed that a 7% of 3000 people had made a fraudulent motor claim and 48% said probably would if the situation arose

Date - 13/05/2004