Fraud sends insurance premiums soaring
0 Comments | Western Morning News, The, Jul 23, 2010
Fraud is causing car insurance premiums to rise at their fastest rate for years. Premiums rocketed by at least 11.5 per cent in the last three months — the biggest increase since the AA started tracking insurance trends 16 years ago.
Policies sold through price comparison sites rose even more – by 12.7 per cent – while third party, fire and theft (TPFT) cover bought on these sites rose 17.1 per cent, AA Insurance said.
The “shoparound” index, based on the average of the cheapest three quotes, indicated that comprehensive cover went up 11.5 per cent to just under Pounds 704 in the last three months, with TPFT rising 15.9 per cent to just under Pounds 964.
Taking all the methods together, comprehensive cover rose 12.1 per cent to Pounds 980 while TPFT went up 15.8 per cent to Pounds 1,225.
AA president Edmund King said: “Recent figures suggest crime levels are falling but crucially they miss a new 21st-century wave of fraud, such as providing false information and claiming for non- existent personal injuries, which just isn’t being picked up.
“It’s now much easier to get an insurance quote online, for example, comparison sites can enable dishonest individuals to manipulate information to get a lower premium.
“Insurers are increasingly charging higher prices to these people to cover the increased fraud risk.
“This quarter’s increase comes on top of previous record rises. For those shopping on comparison sites, average premiums have climbed by 32.8 per cent – or Pounds 193 – in just nine months.”