UK’s Leading Insurance Broker, Bollington Insurance, Counts the Real Cost of Motor Trade Insurance Fraud
Macclesfield, UK (PRWEB UK) 27 November 2013 -- With the sharpest decline in car insurance premiums in 20 years, experts at Bollington Insurance warn drivers not to become complacent, as the rise in fraudulent motor trade insurance claims outweighs this benefit, increasing renewal premiums by an average of £50 per annum.
Established in 1973, Bollington Insurance Brokers Limited has grown to become one of the largest insurance brokers in the UK. Forming part of the larger Bollington Group, the company’s core focus is on five trading divisions: Commercial, Care, Motor trade, Business Insurance for SMEs, and Personal Insurance.
Motor trade insurance fraud takes many forms. Some drivers may think a small ‘white lie’ on a renewal form – such as not providing information about the full cost of a claim when asked, in order to get cheaper insurance – is not as bad as some of the organised gangs in ‘cash for crash’ scams (where innocent drivers are deliberately targeted by organised gangs to create accidents in order to cash in). Yet both activities are fraudulent and illegal.
Another worrying aspect for the team at Bollington is the increase in the number of ghost brokers. The internet and social media has opened up the floodgates for unscrupulous individuals posing as brokers who sell bogus ‘insurance’ at attractive prices.
For a number of reasons, young drivers between the ages of 17 and 24 are more likely to be the target of ghost brokers. For example, this group of drivers often face higher premiums due to the well publicised accident statistics amongst younger drivers, and they are more likely to use social media or well known advertising websites to search for the best insurance deals.
Bollington Insurance’s Intelligence Analyst, Nicola Unsworth, said: “In recent years there has been a significant growth in ghost brokers. Many young drivers are taken in with the low prices and the ease of getting insured.”
“This can have devastating effects as, sometimes unbeknown to them, they are committing a serious offence which can result in them paying large sums of money, whether through fines, insurance claims or both. They face the risk of their car being impounded and in the worst case scenario, they face imprisonment.”
“Fraudsters try many tactics, with fraudulent websites often closely reflecting those of well known brands.”
As a company, Bollington Insurance uses many different ways to combat fraud, but the fraudsters are clever and continually seek to get around these. However, the net is closing in. Since September 2012, the Insurance Fraud Bureau (IFB) has held a central database of insurance fraudsters which enables all insurers to share information on known fraudsters. This information, combined with the new Driver and Vehicle Licensing Agency (DVLA) database due to be launched next year, which will enable insurers to check up-to-date information on driving entitlements and offences at the point of renewal rather than simply when claims are made, is one further step in combating motor trade insurance fraud.
The high level cases in the news are just the tip of the iceberg. Fraud has become such a major problem in the insurance industry that the Association of British Insurers (ABI) stated in July that fraud has, for the first time, topped £1 billion a year which is costing honest policy holders around £90 million a month.
“We are often asked why the process of obtaining a new motor trade insurance quotation is so complex. The answer is that it needs to be, to sieve through the layers of fraud and to validate applications for insurance. Our message is simple: buy motor trade insurance from the right place, not just at the right price. Talk with a reputable company registered with the Financial Conduct Authority (FCA) and you will get the right type of policy to suit you,” concludes Nicola.
More information on motor trade insurance fraud and ways to avoid this can be found at: http://www.bollington.com.
Nicola Unsworth, Bollington Insurance, http://www.bollington.com/, 0845 601 3852, [email protected]
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