Welsh insurer's fraud find is punishing honest motorists, say experts

Fraud is punishing honest drivers because the cost is pushing car insurance premiums up faster than ever, according to AA Insurance after Welsh-based moneysupermarket.com suggests a fifth of young drivers have ‘staged’ an accident.

Increasing car insurance fraud is contributing to the fastest-ever increases in car insurance premiums, AA Insurance confirms.
This follows a report suggesting that 1 out of every 20 motorists aged under 35 has ‘staged’ an accident in order to make a fraudulent car insurance claim.
As a result, young drivers are finding their premiums rising much faster than average.
Simon Douglas, director of AA Insurance, said, “The AA has been tracking the quarterly movement of average car insurance premiums across the industry for 16 years and premiums are now rising at their fastest ever rate. The price of a typical comprehensive car insurance premium, currently about £704, rose by an unprecedented 30.9 per cent over the past year.
“In just three months, premiums rose on average by 11.5 per cent and, for drivers under the age of 30, by 13.4 per cent to £1,128."
Douglas believes that fraud accounts for a large part of this. “While the organised ‘cash for crash’ scams that ripped millions of pounds off insurers have made headlines, the problem of car insurance fraud is much deeper and has become one of the principle drivers of insurance premium inflation,” he says.
According to some industry commentators, over the past year, for every £100 taken in premiums, insurers have been paying out up to £122 – which, Douglas says, “is simply not sustainable and it’s honest drivers who are paying for it.
“The evidence from moneysupermarket.com, suggesting that thousands of people are attempting to try ‘cash for cash’ themselves – perhaps to get someone else to pay for past damage or to make a claim for non-existent whiplash injury, is deeply worrying. This is extremely rash and puts peoples’ lives at risk.
“Defrauding insurance companies is not a victimless crime because it affects all honest drivers.”
Douglas also believes that dishonest claims are being encouraged by a “fast-growing ‘black market’ of personal injury claim lawyers who are only too ready to promote ‘free’ cash by claiming for relatively minor, or even non-existent, injury that people would otherwise not have thought to claim for before.”