4,000 fraudulent insurance claims 'uncovered each week'

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Motorists' dishonest applications for insurance are backfiring on them, with more than 4,000 fraudulent attempts being uncovered by insurers every week.

Some 212,000 attempted dishonest applications for motor insurance were uncovered in 2014, marking a jump of nearly one fifth (18%) compared with 2013, according to the Association of British Insurers (ABI).

The latest figure equates to just over 4,000 fraudulent applications being found every week.

Common lies exposed include "forgetting" to come clean about previous claims or unspent convictions when asked and giving a false address or a post code for a lower risk area, the ABI said.

In other cases, parents tried to insure a vehicle being mainly driven by their son or daughter in their name to get a cheaper deal. This is commonly known as "fronting".

An index compiled by the AA recently showed that the cost of car insurance policies has recently started to creep up, after a long period of cheaper deals.

The average quote on offer for a driver who shops around for comprehensive cover was £549.46, according to the AA, marking a £27.34 or 5.2% increase over the three months to the end of June.

The cost of insurance is expected to increase further in the coming months. In the recent budget, it was announced that insurance premium tax will be increased from 6% to 9.5% from November - leading insurers to warn that millions of customers will face higher costs for cover.

The AA has estimated that the tax hike will add an extra £18 to the cost of a typical comprehensive car insurance policy.

The ABI is also warning against "ghost broking" scams. These involve illegal insurance advisers selling bogus motor insurance policies, that result in the innocent motorist driving illegally without valid motor insurance, facing prosecution and having their vehicle seized and crushed. Ghost brokers may operate through professional looking websites, and in pubs, clubs, car parks and university campuses.

The ABI said that in one case, an illegal insurance adviser who made £65,000 selling fake car insurance was jailed for two years. Another man, who sold worthless car insurance to Manchester students, was jailed for three years, it said.

The Insurance Fraud Bureau (IFB), which manages cross-industry, large scale ghost broker investigations, is currently dealing with 26 cases of ghost broking fraud.

Mark Allen, the ABI's fraud and financial crime manager, said: "Insurers recognise that innocent mistakes and oversights happen. But anyone lying to get cheaper motor insurance, or tempted by cheap insurance offers without first checking that they are genuine, risks driving illegally.

"The consequences include getting a criminal record and a massive financial headache if found to be at fault for a crash. The risks are just not worth it – especially when you can shop around for the right policy at the lowest price."

He said that various industry initiatives, such as the Insurance Fraud Register, MyLicence that allows insurers to check for any motoring offences, and the work of the Insurance Fraud Bureau and the Insurance Fraud Enforcement Department in tackling ghost brokers are helping to reduce the scope for insurance application fraud.

Here are the ABI's tips to help motorists get the best value legal motor insurance deal:

:: Shop around. Motor insurance is a very competitive market, with insurers, comparison websites, insurance brokers all offering competitive deals that will ensure you get the right policy and the best price.

:: Lower your risk. The following steps can all help cut the cost of cover - have an approved immobiliser fitted, keep the vehicle in a garage or on a driveway overnight and have a telematics-based pay as you drive policy.

:: Opt for a higher voluntary policy excess. The higher the amount of any claim you pay yourself, the lower the premium.

:: Buy your insurance from a reputable source and avoid policies sold on social media networking websites, pubs, clubs and newsagents. You can check if your policy is on the Motor Insurers' Bureau's Motor Insurance Database - www.askmid.com - which holds details of all vehicles insured in the UK, and check on the Financial Services Register - www.fca.org.uk/register - that the insurer or broker is authorised.

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4,000 fraudulent insurance claims 'uncovered each week'

Price new: £5,995

Dacia has made a big impact in the UK with its line of affordable motors.
The Sandero is the foundation of the brand's offering and is famed for being the UK's cheapest car.

With a group two insurance classification it's also one of the cheapest cars to insure right now.
The entry level Access model is sparsely equipped, but it has a practical interior, big boot and low running costs.

Price new: £8,060

The Seat Mii is a small city car which Auto Express praises for its spacious interior, good build quality and supple ride.

All models are in insurance group one, bar the group two Sport version.
The Mii is available in three-door or five-door styles, but both measure just 3.5 metres, making it perfect for getting around town.

Price new: £8,090

The Skoda Citigo was crowned Auto Express Best City Car 2013.

The magazine praised its low running costs and practicality as well as its grown up driving experience.
Like its Mii stable mate the Citigo has group one insurance in all apart from its top specification model, making it one of the cheapest cars to insure.

Price new: £8,265

The third of the Volkswagen's group of three city cars to make the list is the Up!

Auto Express says the Up! was 'born to rule' city streets with its small dimensions and lightweight body.
There's three versions of this fun city car; Take Up! has a group one rating as does Move Up! while the higher spec High Up! gets a group two classification.

Price new: £8,345

The Hyundai i10 is another car which can get you a cheap insurance quote thanks to a group one insurance rating across all the 1.0-litre petrol models.

Auto Express says the new 2014 i10 offers big car features in a small package. And for £8,345 you also get Hyundai's five-year warranty and roadside assistance package.

Price new: £8,995

Vauxhall has managed to squeeze one of its full sized Corsas into insurance group two.
Auto Express says the 1.0-litre ecoFlex model has the lowest insurance costs of any mainstream supermini.

The eye-catching design, solid interior and big-car features make it an appealing buy for drivers.

Price new: £9,575

The Smart car caused a bit of a stir when it first appeared thanks to its dinky dimensions and bold two-seat layout, making it very useful for driving about town and absurdly easy to park.

The Smart ForTwo is the latest incarnation, which keeps to the same formula; it still has only two seats and is one of the smallest cars on the road measuring just 2.5 metres long,
The entry level 0.8- and 1.0-litre models qualify for group two insurance.

Price new: £11,810

The Peugeot Partner Tepee 1.6 VTi is the passenger version of the Partner van and according to Auto Express easily the most spacious new car that currently qualifies for a group two insurance rating.

It's got a boxy shape that provides plenty of room and has sliding doors which make it a very practical and flexible family car.

If you're after something smaller the Peugeot Bipper Tepee, which is the smallest of Peugeot's family of Tepee MPVs, also gets a group two insurance rating.


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