Consumers Will Commit Fraud for Cheaper Car Insurance

Insurance fraud costs U.S. consumers billions via inflated rates. Worse, uninsured motorist pools are a huge tax on honest drivers who have no say in the added rates imposed on them because of deadbeat drivers. Trial lawyers love the system because they make money off of it.

To say that the auto insurance business is a mess is to understate the problem. A new study claims that one quarter of insured motorists think that it is now acceptable to mislead insurers to reduce their insurance premiums, according to LexisNexis.

This research found that 40% of UK motor insurance policy holders believe the cost of their policy is too high, and many are taking fraudulent measures to reduce the cost of their policy.

The study that explores consumer attitudes to motor insurance says that 25% think that some omission or adjustment of information is acceptable in order to reduce premiums when applying for insurance.

When it comes to deciding who is named as the main driver, 29% of people admit to ‘fronting’ their policy by naming someone other than the person who will drive the car the most. Factors influencing this decision include who has the main income (25%), a better driving record (12%) or who has historically had a lower cost policy (11%).

The research also claims that 13% think it is acceptable to use someone else’s address when applying for motor insurance, and that 15% think it is acceptable to try to change their number of ‘no claims discount’ years to achieve a better discount.

Adjusting or omitting information is likely fraud. Consumers could find themselves without coverage in the event of an accident and insurers can find themselves exposed to unforeseen risk.

Attitudes to making a claim are also explored, with the research finding that one in five (20%) think it is acceptable to report a hit-and-run accident to claim for self-inflicted damage. One in ten (8%) think that it is acceptable to exaggerate the severity of a personal injury, such as whiplash, to increase the amount of money paid-out.

However in the bold new world of snooping, two thirds (64%) of people are comfortable with a telematics type of product that would share information about the events leading to a traffic accident, in order to help determine which driver was at fault.