Cheap Car Insurance Could Land You In Jail! or Banned for Life!
LONDON - UK
Car Insurance comparison website Car-Insurance.tv is warning drivers to be very careful when applying for cheap car insurance.......
Car Insurance Fraud has been on the rise in the UK for the last few years.
One could argue disproportionately due to the influx of Eastern European criminal gangs staging road accidents, however the current recession has seen suspected cases of car insurance fraud rise to unprecedented levels, sometimes in very unusual areas.
One worrying factor is the trend to obtain cheap car insurance by 'lying' on the online proposal form or over the phone. Much cheaper car insurance premiums can be obtained by those who lie, omit, or deliberately falsely declare information when applying for cover.
Insurance Blogger has even seen some websites encouraging this type of behaviour!
The savvy public looking to save a few pounds will bend the truth to obtain cheaper premiums as a recent case that appeared before Bridlington Magistrates in Yorkshire demonstrates..
A driver of green Ford Fiesta, a Mr Pears aged 24 of Bridlington was found to have been behind the wheel of his car without valid business insurance and was using the vehicle for business purposes without the appropriate insurance cover in place.
The court heard that when police routinely stopped the vehicle, they noticed that
Pears had a number of insulated pizza bags on the front passenger seat. He explained he had just begun working as a pizza delivery driver on a trial basis that day.
Although he was able to produce a valid insurance policy for the car, a quick search of the Motor Insurance Database by the police officers at the scene revealed that the policy had a usage type of SDP and only covered him for social, domestic and pleasure use of the car and excluded business use, the bench heard.
Pears was fined £525 and had his driving licence endorsed with six penalty points.
Costs of £40 and a £15 victim surcharge were also imposed.
What this goes to show is that if you are caught.. and you will be! Your car insurance for the future will never be Cheap!
Indeed you may not even be able to get cover again once you have commited Insurance Fraud!
It could amount to a lifetime Driving Ban!
Cheap car insurance can be obtained legally by comparing car insurance quotes from many suppliers and by answering the questions truthfully, on one form.
Labels: car insurance, car insurance fraud, cheap car insurance, cheap motor insurance, cover, insurance fraud, Motor Insurance DataBase
The Hidden Costs of Uninsured Drivers in Your Car Insurance Premiums
Car Insurance - Uninsured Drivers Cost You More Than Money!
By
Dave HealeyWe are constantly reminded that the cost of our car insurance premiums are inflated because of insurance fraud and exacerbated by the number of uninsured drivers on the roads! It is certainly true that in the United Kingdom all car insurance companies are required by law to pay into the Motor Insurance Fund (MIF).
This pool of money was designed to protect and recompense the innocent British public, from damage or injury caused by an increasingly large number of uninsured drivers. and accidents involving untraceable hit and run drivers.
The Motor Insurance fund was set up over sixty years ago, immediately following WW2 when the licensing laws and car insurance regulations were still being formulated and yet many of our modern laws were yet to be put onto the UK statute books.
The war years had seen the number of cars and vehicles in the UK rise exponentially, particularly towards the end of the war after the USA joined in, and for the first time British women were systematically taught to drive in their thousands, and indeed even the Queen, Princess Elizabeth as she was at the time, mucked in with driving vehicles of all shapes and sizes and women drove the domestic war effort.
At the end of the war Britain's roads were beginning to become cluttered and returning troops and foreign bases exacerbated the number of unlicensed cars and drivers on UK roads without car insurance to record levels.
As the number of accidents involving uninsured drivers rose steadily, public outcry forced the government to act and in 1946 a Government 'Quango' called the Motor Insurers Bureau (MIB) was established to oversee the whole operation of public compensation for damage, where no car insurance covered the costs.
The MID is to this day funded by a proportion of every policy sold, and to date has paid out over £2 billion in total. The MID have calculated that the cost to each of us when we purchase car insurance is an additional £15 to £30 per policy to cover uninsured drivers, which amounts to more than £200 million every year.
Furthermore, recent statistics from the Bureau indicate the problem of driving without car insurance has not declined over the intervening years since its foundation, and show that the UK continues to have a very poor record, with one in every twenty cars on the road being driven without proper car insurance cover.
Breaking down the statistics further, reveals that the amount of damage caused by drivers without car insurance each year far exceeds the amount paid out in claims every year through the risk fund.
It is often difficult to receive full compensation even if you have identified the uninsured driver, who may well have been prosecuted by the police, and you make a claim through the MIB.
A satisfied claim, that is those claims that are paid out, usually only occur when a particular claim has run the full course of the law and a judgement handed down.
In a case of a hit and run driver without car insurance who is unidentified, the MIB does not pay all legal costs, which can quickly run into thousands, but merely makes a contribution with a deduction to cover the balance of legal costs and expenses.
Thus the hidden costs and misery caused by the actions of those who choose to drive without car insurance is far greater than the official statistics of two hundred million pounds every year.
It is with these figures in mind that the MIB became the centralised point of a new database, the Motor Insurance Database, created at the turn of the century. The database is updated daily with details of every person and their car, who buys a car insurance policy. This information is now immediately available to all police forces throughout the Country, who through automatic number plate recognition systems, can instantly send a car registration number to the MID.
This allows the system to immediately indicate to a police office in the field, cars that are being driven and the driver has valid car insurance in force.
Original Article Source:
http://EzineArticles.com/?Car-InsuranceLabels: car insurance, claims, insurance fraud, motor insurance, uninsured losses
Car Insurance Fraud puts £60 on every policy premium
Car Insurance fraud costing Britain £1.6 billion a year - hardly what we need with the credit crunch and despite the increased use of Big Brother powers and the Motor Insurance and Claims Databases. Quite often the perpetrators may be unaware that a false insurance declaration is a fraud offence, however innaccurate or misleading information is frequently being given in order to reduce car insurance premiums.
As the credit crunch worsens, insurers are seeing evidence of increasing underwriting fraud, costing honest car insurance customers between £50 and £60 each per policy.
In a desperate attempt to cut the price of
car insurance premiums, people are declaring false information when they purchase the cover, perhaps unaware that their insurance cover may be invalidated as a consequence. The use of the Internet has exacerbated the problem.
Simon Warsop, director of pricing at Norwich Union
Car Insurance, said:
"As the largest insurer in the UK we're at the forefront of the fight against fraud for the benefit of our honest customers. We have systems in place to identify car insurance policies that are bought using fabricated data, so when declaring information for an insurance quote it's essential that customers have supplied accurate information to ensure they have adequate cover in the event that they need to make a claim."
"Fortunately, the majority of our customers are entirely honest and provide accurate, fully disclosed information when they call or go online for a quote. However, there are dishonest people that risk invalidating their insurance by giving incorrect information in a bid to get cheaper motor insurance."
Incorrect No Claims Discount (NCD) - Can be up to 70% on maximum
In a bid to get a cheaper quote people are claiming more years of no claims than they have actually accrued, either through misunderstanding or deceit. NCD relates to the policy holder and the vehicle, not to anyone who happens to be named on an insurance policy, so unless the insurance policy is in your name you are not able to claim for your NCD. If you have more than one vehicle then you need to build up NCD on each vehicle. Insurers including Norwich Union will consider offering an introductory NCD to named drivers with clean records when they become a policy holder.
Using a Second or Double address - Rates are determined by Postcode and vary largely by sector
Some people are fortunate enough to have two homes. Others try to declare a different, lower risk address for where the vehicle is kept as opposed to their high risk postal address in an effort to reduce their premium. Sometimes they have some sort of connection to the other address, sometimes it appears the address is randomly chosen. It is important to register your vehicle at the address that is your main residence. .
Not declaring convictions or accidents - will cause a claim to be invalidated
Over eight million licence holders have been convicted of speeding in the UK and 600,000 drivers have a drink drive conviction, but a large percentage of those do not declare the conviction to their insurer. Insurers can request a licence check before proceeding with a claim and will then pick up any convictions. Also details of accidents are held on an industry wide database and accidents can be checked. So ensure you declare any accidents and convictions to your insurer at the time of taking out the policy and keep them updated at renewal time.
Annual mileage - affect the premium rating - more miles more risk!
Some people may misjudge how many miles they are doing per year and may actually submit too many miles, however, there are a minority who are declaring far fewer miles than they actually drive in a bid to reduce premium.
A good way to accurately declare annual mileage would be to consult your MOT certificate which will clearly state how many miles have been driven in the 12 months between MOT checks or to check your car's service history booklet where mileage is also recorded. If the car is subject to a claim the mileage is the first thing checked!
Fronting
A fraud called fronting occurs when a young person is the main driver of a car, but the insurer is falsely told that a parent or other older person is the main driver. This means the young driver is not fully declared and will not be able to accrue any no claims bonus. It is important that insurers are covering the appropriate risk with the correct premium; otherwise this premium will have to be borne by other, honest customers. (Please see appendices for case study example).
Incorrect information given
In an attempt to get a cheaper insurance quote people have declared wrong age, wrong sex, the wrong payment method, omitted car modifications or even the wrong car on occasion. The incorrect information is often so blatant that there would be no way they could ever claim on their policy. (Please see appendices for case study example).
Fraud statistics show that:
Fraud costs the insurance industry over £1.6 billion a year, money that has to be passed on to customers
This equates to £4 million per day and increases insurance premiums for honest customers by up to £60 per policy
1% (400,000) of all drivers are unlicensed and these drivers are up to 9 times more likely to have a crash than licensed drivers
Norwich Union added:
"As the nation feels the pinch from the credit crunch, more and more people think that they can get away with dishonesty for what is seen as a victimless crime. Insurance fraud is certainly not a victimless crime. The victims are actually the majority of honest drivers who are subsidising the dishonest ones."
"The whole point of insurance is to cover the costs for a potential future loss, so running the risk of invalidating your insurance by knowingly providing false information is false economy. Honesty is definitely the best policy, and I would certainly advise against ‘massaging your details' in order to get the cheapest quote. In times of economic turmoil insurance cover is more important than ever so don't jeopardise your cover by giving false information."
For cheaper
specialist car insurance and classic car insurance visit Lancaster Insurance and get the best cover compared, coupled with the personal touch.
Labels: car insurance, insurance fraud
