New report shows the prevalence of insurance fraud throughout the United Kingdom
The Association of British Insurers has released a report concerning auto insurance fraud in the United Kingdom. According to the organization, some 500 people lie on their insurance applications forms every day. The report shows that in 2013, 3,500 fraudulent applications were filed with insurance companies every week. These applications contained information that was inaccurate, if not outright incorrect. Applicants often left out important information that would determine the cost of their insurance coverage.
Fraudulent insurance applications are becoming more common with every passing year
Auto insurance fraud is nothing new in the United Kingdom, but the report represents the first time and industry group has collected such information concerning fraudulent insurance applications. There are many factors that have contributed to this practice among consumers. Some of these factors have to do with the country’s economic climate and the costs associated with owning and operating a vehicle. Many consumers are trying to save money, and leaving out details concerning past accidents and insurance claims is often seen as a viable way to do so.
Report highlights instances of insurance fraud and people attempted to hide information about their past
The report notes that drivers with poor credit ratings often tried to use an alias in order to purchase less expensive auto insurance coverage. Other applicants failed to disclose information concerning past claims and unresolved legal issues involving traffic violations. The report notes that one particular applicant attempted to change the details of their driving record in an effort to erase past convictions.
Some $2.5 billion in undetected insurance fraud is committed every year in the UK
The Association of British Insurers claims that fraudulent applications contribute to higher auto insurance rates. An estimated $2.5 billion in undetected insurance fraud is committed every year in the United Kingdom. Insurance companies must recover from these losses and this means raising premiums for the policies they sell. As fraud continues to be a problem, it will continue to exact an expensive toll on consumers that are, by and large, considered honest.