Andrew Vine: Car insurance swindle is not a victimless crime

SITTING in a queue of stationary traffic the other day, my attention was caught by the aftermath of a minor shunt between two cars on the opposite carriageway.

The drivers were tut-tutting over a dented rear bumper and a broken headlight, but then got on with exchanging details. Just as I started to move off, they shook hands and went on their way.

A very civilised way to sort out one of the all-too-common bumps and scrapes that occur on the road, and a straightforward matter for their respective insurance companies to settle.

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Or perhaps not, if one of those drivers turns out to be amongst the increasing number lying to insurance companies in order to obtain cheaper premiums, leaving a blameless motorist out of pocket after an accident, and just as happened to me.

The number of fraudsters behind the wheel is rising alarmingly according to the Association of British Insurers, and that is both a worry and an annoyance for every honest motorist.

It found that 212,000 dishonest applications for motor insurance were made last year – an increase of 18 per cent on the previous 12 months.

And it believes that number may be the tip of the iceberg, with much higher numbers successfully cheating the system.

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Attempting to swindle insurers means drivers risk not being covered if they have an accident.

Applicants were caught out lying about previous claims in order to protect no-claims bonuses, or supplying false addresses in lower-risk crime areas.

Parents were busily committing fraud by insuring vehicles in their name when their sons or daughters – who would attract higher premiums – were in fact the main drivers.

That one struck home with me, having been the unwitting victim of an insurance swindler when a car shot out of a parking space and staved in my front passenger door.

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The driver, a young man of about 20, was full of apologies and immediately accepted responsibility. We exchanged details, and I drove clattering home to get the policy documents out and phone my insurers.

Annoying, certainly, but just one of those things and not worth getting worked up about.

Until a call back from my insurers a few days later, that is. The claims handler explained as gently as possible that the young driver who had hit me did not have valid insurance.

The policy was in his father’s name, but it had somehow come to light that the son was the main driver.

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So what did that mean to me? I asked with a sinking feeling.

In a nutshell, I could claim for the damage on my own comprehensive policy, which would mean the loss of my no-claims bonus and higher premiums in years to come, or if I wished to avoid that, I could bear the cost of the repairs myself.

That’s the point at which I did get worked up. The best estimate I had for repairing my car door was £400.

I briefly considered pursuing the driver who had hit me through the small claims court, but decided against it because of the time it was likely to take up, and through gritted teeth paid for the repairs.

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My insurers later informed me that the father and son had been reported to the police. Good. I hope they went to court and had the book thrown at them.

The father presumably chortling in glee at having chiselled his insurance company out of a few pounds by lying 
to get his son a cheaper premium cost me hundreds, and all over the country there will be 
other drivers fuming at having to fork out in similar circumstances.

These relatively small-scale fraudsters justify their dishonesty by reasoning to themselves that the only victims are the insurance companies with profits running into the millions, which can afford to bear the loss.

But there is no such thing as a victimless crime. Somebody, somewhere always ends up as a victim.

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Ultimately, that means the millions of us on the road with proper insurance. We sigh at the premiums asked, but pay up because that’s the price for being behind the wheel legally with peace of mind that we’re covered if anything happens.

Our premiums go up because of fraud, whether it is parents lying about offspring, or organised criminal gangs staging collisions to collect payouts.

It is time to get a lot tougher with insurance fraudsters. In common with many other drivers, I would happily pay a few pounds extra on my motor policy if it went to fund a push to track down the dishonest and drag them into court.

Ultimately, a message needs to go out to those who would swindle – and leave other motorists out of pocket – that they will be caught and punished. That way, premiums for the rest of us on the road might increase a little less relentlessly each year.

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