Car Insurance Fraud is Rising
Leading Insurer, Norwich Union hare released the results of recent research into a rise in fraudulent car insurance applications.
The recent increase has been blamed on the current economic crisis aka ‘the credit crunch’ where motorists are declaring false information to insurance companies in an attempt to reduce their car insurance premium.
With the insurance being given under false information, not only could the policy become invalid if an accident was to occur but it also could increase the overall cost of car insurance to the public by increasing administration costs of insurers.
The cost of fraudulent underwriting alone is up to £1.6 billion a year and of course, these expenses are passed onto the motorist. Simon Warsop, director of motor pricing at Norwich Union, said: “As the nation feels the pinch from the credit crunch, more and more people think that they can get away with dishonesty for what is seen as a victimless crime.”
He added “insurance fraud is certainly not a victimless crime”, explaining that honest motorists end up paying between £50 and £60 more for their policies because of underwriting fraud.
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