Most cases of Vehicle Insurance fraud are identified before a claim is paid out,
however estimates published say that three to five percent is paid out
on claims which are later identified to be fraudulent.
That said, motor insurance fraud is opportunist by nature, and so some claims
go undetected.
The motor insurance industry is working hard to address these issues, by monitoring and analysing fraudulent claims and using this knowledge to strengthen their methods of detecting fraud.
This approach ensures that the industry is constantly finding new and better ways to tackle fraud.
However, in these difficult economic times, fraud is more likely to occur owing to increased finacial pressures.
One particular area of concern is known as 'Fronting'.
Fronting occurs when the main driver of a vehicle is incorrectly stated by the policyholder when taking out a motor policy in order to achieve a lower premium.
Research was commissioned to look at how motorists viewed the practise
of 'fronting'. Several couldn't define the practise and one in five young motorists admitted to previously, or currently, using a 'fronted' insurance policy.
The activity aimed to highlight to consumers that by providing
misleading information, motorists are committing insurance fraud, which
could invalidate a policy, leaving them exposed to additional costs, and
potentially footing the bill, if they are involved in a accident.
The research also indicated a disconnect between drivers' perceptions of
fronting as a 'white lie' versus the reality of it as a legal offence.
There was also some confusion over responsibility for damages in the
event of an accident. A third (31%) of drivers wrongly assume that they
will be covered if the policy is 'fronted', whereas in fact, if proven,
insurers can refuse to pay for damage to the "insured" vehicle and may
look to recover third party claim costs from the policyholder, driver or
both.
So, when giving information regarding your motor insurance, be accurate and
don't fib as you may be found out and it cost you 'big time'.
