Motor insurance fraud results in the honest policyholder having to pay more for their cover than he or she should really be paying. Whilst this may seem unfair to some people, insurance companies operate to make a profit.
The Association of British Insurers (ABI) carried out some interesting research that discovered a drop in the value and number of motor frauds that were detected. The value of such frauds was £780 million last year with this being a fall of 5% when compared with 2015. The number of detected motor frauds also dropped by 4% to 69,000 in 2016 when compared with the previous year.
There was a significant amount of organised crime such as cash for crash scams that had an impact on motor insurance premiums. For instance, there was an individual who sold car insurance policies to people but these policies did not exist. The individual was ordered to repay £253,000.
Opportunistic frauds to do with motor insurance rose in 2016 to 57,000 whereas in the previous year such frauds totalled 54,000.
Whilst it is pleasing to see a drop in the number and value of motor insurance frauds the figures are still extremely high. Had these frauds not been committed then it is quite probable that the car insurance premiums that everyone is paying would be lower and when you consider just how much the cost of motor insurance has been rising over quite a lengthy period, anything that could result in the motorist paying less for their cover would be most welcome.
It should be borne in mind that most motorists who make a claim on their car insurance policies do so honestly. However, it is the minority who do not who are no doubt disadvantaging the honest motorist with having to pay more for their cover than they would otherwise need to. Let us hope that dishonest claimants are identified and dealt with appropriately.