Consumers warned against committing Covid insurance fraud
- Every day last year, insurers detected 2,000 dishonest insurance applications and 300 fraudulent claims1.
- Insurance cons including lies, exaggeration and deception have serious consequences – from having a policy cancelled, a claim refused to imprisonment.
- Switching is the most effective way to save money on your insurances.
As the recession bites and the potential for more economic uncertainty increases with local and national Coronavirus lockdowns, GoCompare Insurance is warning people not to be tempted to commit insurance fraud.
Historically, in times of economic crisis, insurers see an increase in fraud. To save or make money, opportunists invent or exaggerate claims or, deliberately provide false or incomplete information when applying for cover.
Insurance fraud is often seen as a ‘victimless crime’ – but this is far from the truth. The cost of fraud is passed on to all insurance customers - pushing up prices of essential products, such as motor and home insurance. In addition, crimes instigated to obtain an insurance pay-out such as a staged road accident or a house fire can put lives at risk.
Last year1, 107,000 fraudulent claims worth £1.2billion were uncovered by insurers. Insurers also detected 760,000 confirmed or suspected dishonest insurance applications worth £1.4billion. Non-disclosure of previous claims was a common element of application fraud.
Motor insurance fraud was the most common type of insurance fraud. This is committed when drivers either lie or withhold information to get cheaper cover. Common lies applicants make include the nature of their occupation, misrepresenting the main driver - also known as ‘fronting’, being dishonest about their driving record and not providing details of previous claims or motoring convictions. Other cons include false or inflated claims.
The consequences for people caught trying to defraud their insurance provider are severe. Depending on the circumstances, their insurer may cancel the policy, refuse to pay a claim, or prosecute them for fraud. Insurance cheats will also find it harder and more expensive to obtain cover in the future.
Fleur Lewis, Head of Fraud at GoCompare Insurance commented, “The coronavirus has had a devasting impact on many people’s health and financial wellbeing. Recessions typically spark an increase in fraudulent activity - some people view it as an easy way of making money, without hurting anyone. In truth, dishonest customers are effectively dipping into the pockets and purses of other people, by significantly pushing-up the cost of insurance for everyone.
“The vast majority of insurance customers are genuine, and insurers work hard to settle honest claims quickly. To protect genuine customers, tackling fraud is a high priority for the insurance industry. New technology, increased collaboration and data sharing has enabled the industry to improve its fraud prevention and detection measures. So, the chances of insurance cheats being caught have never been greater.”
Fleur Lewis continued, “When applying for or renewing your car or home insurance - honesty is always the best policy. Proposal forms are designed to give insurers all the information they need to make decisions about your application including the price and the terms they are willing to offer you. You are required to answer all the questions on the application form as fully and accurately as possible.
“The consequences of withholding or providing false information to reduce the cost of cover can be severe. Far from saving money, being untruthful could be an expensive mistake. Likewise, being convicted of staging a car accident or fake burglary to get an insurance pay-out could costly you dearly and, depending on the circumstances, could risk your liberty.
“There are significantly better ways of reducing the cost of your cover - including shopping around at renewal or, opting for a larger excess.”
GoCompare Insurance customers can save up to £277 on their car insurance, £107 on their home insurance, simply by comparing the best deals online and switching.2
GoCompare was the first comparison site to join the Insurance Fraud Bureau (IFB), a not-for-profit organisation that acts as a conduit of information for the insurance industry to help fight against fraud. For more information on insurance declarations and non-disclosures visit: https://www.gocompare.com/car-insurance/guide/declarations-and-non-disclosures/
For further information please contact:
Gordon, Jason or Liz at MAW Communications on 01603 505 845
Keep up-to-date with GoCompare on Twitter; @GoCompare
Notes to editors
1Source: ABI’s Annual Fraud Survey 07/09/20.
2GoCompare switch and saving figures based on independent research by Consumer Intelligence between 1 August and 31 August 2020:
Car insurance: 51% of customers could save up to £277 with GoCompare Car Insurance based on a comparison of 30 companies.
Home insurance: 51% of customers could save up to £107 on their buildings and contents insurance based on a comparison of 37 companies.
GoCompare is a comparison website that enables people to compare the costs and features of a wide variety of insurance policies, financial products and energy tariffs.
GoCompare does not charge people to use its services, and it does not accept advertising or sponsored listings, so all product comparisons are unbiased. GoCompare makes its money through fees paid by the providers of products that appear on its various comparison services when a customer buys through the site.
When it launched in 2006, it was the first comparison site to focus on displaying policy details rather than just listing prices, with the aim of helping people to make better-informed decisions when buying their insurance. GoCompare has remained dedicated to helping people choose the most appropriate products rather than just the cheapest, and has teamed up with Defaqto, the independent financial researcher, to integrate additional policy information into a number of its insurance comparison services. This allows people to compare up to an extra 30 features of cover.
GoCompare is the only comparison website to be invited to join the British Insurance Brokers’ Association (BIBA) and is authorised and regulated by the Financial Conduct Authority (FCA).