Young drivers news
08/01/2009
Premiums up £60 due to cheap car insurance fraud
Cheap car insurance is being hit by the cost of fraud with premiums higher by between £50 and £60 per policy, according to figures just published.
Fraudsters are costing the insurance industry more than £1.6 billion a year, equivalent to £4 million a day.
A staggering 400,000 drivers are unlicensed and uninsured - one per cent of all UK motorists - and they are nine times more likely to be involved in a crash than licensed drivers.
Underwriting fraud is being prompted by the economic downturn and effects of the credit crunch as people attempt to shave a few pounds of savings off household bills, reports insurance giant Norwich Union.
The company's motor pricing director, Simon Warsop, said most customers were honest, but the dishonest ones risk invalidating their insurance and putting others in difficulty when injury and damage claims are necessary.
He said many young drivers, as well as some more experienced motorists, think that they can beat the system by deliberately providing false information.
But he said, "We have systems in place to identify policies that are bought using fabricated data."
He said it is important and essential to declare accurate information for a quote for cheap car insurance to ensure adequate cover in the event of a claim.
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