On the Fiddle?

Most cases of Insurance fraud are identified before a claim is paid out, however recent estimates published say that three to five percent is paid out on claims which are later identified to be fraudulent.

That said, insurance fraud is oppurtunist by nature, and so some claims go undetected.

The industry is working hard to address these issues.By monitoring and analysing fraudulent claims and using this knowledge to strengthen their methods of detecting fraud. This approach ensures that the industry is constantly finding new and improved ways to tackle fraud.

However, in these difficult economic times, fraud is more likely to occur owing to increased finacial pressures. One particular area of concern is known as 'Fronting'. Fronting occurs when the main driver of a vehicle is incorrectly stated by the policyholder when taking out a motor policy in order to achieve a lower premium.

Research was commissioned looking at how motorists viewed the practise of 'fronting'. Several couldn't define the practise and one in five young motorists admitted to previously, or currently, using a 'fronted' insurance policy.

The activity aimed to highlight to consumers that by providing misleading information, motorists are committing insurance fraud, which could invalidate a policy, leaving them exposed to additional costs, and potentially footing the bill, if they are involved in a accident.

The research also indicated a disconnect between drivers' perceptions of fronting as a 'white lie' versus the reality of it as a legal offence.

There was also some confusion over responsibility for damages in the event of an accident. A third (31%) of drivers wrongly assume that they will be covered if the policy is 'fronted', where in fact, if proven, insurers can refuse to pay for damage to the "insured" vehicle and may
look to recover third party claim costs from the policyholder, driver or both.

So, when giving information regarding your insurance be accurate and don't fib as you may be found out and it cost you 'big time'.