Study on motor application fraud

According to a new study by LexisNexis, one in four consumers would commit motor application fraud, while one in five think it acceptable to report a hit and run accident to claim for self-inflicted damage. The survey was carried out on nearly 1,000 insured UK drivers.

The survey results

Out of those surveyed, 40% believe that the cost of their motor insurance is too high and many are taking fraudulent measures to reduce their policy costs. One in four, 25%, think that omissions or adjustments of information is acceptable in order to reduce premiums when applying for motor insurance.

When it comes to deciding who is named as the main driver, 29% of respondents admit to 'fronting' their policy by naming someone other than the person who will drive the car the most, such as young drivers using their parents instead of themselves. Factors in this decision include who has the main income at 25%, a better driving record at 12% or who has historically had a lower cost policy at 11%.

The research also shows that 13% think it's acceptable to use someone else's address when applying for motor insurance and that 15% think it acceptable to try and change their number of 'no claims discount' years to achieve a better discount.

Attitudes to a claim were also explored in the survey, with the results showing that one in five, 20%, think it is acceptable to report a hit and run accident to claim for self inflicted damage. Meanwhile, 8% think it is acceptable to exaggerate the severity of personal injury, such as whiplash, to increase the amount of money paid out.

Not all of the results were bad,with two thirds of those surveyed, 64%, saying that they would be comfortable with a telematics type of product that would share information about the events leading to a traffic accident, in order to help insurers determine which driver was at fault.

Comments on the survey results

LexisNexis UK managing director, Bill McCarthy, commented, “One solution for insurers to help address consumers who are willing to mislead is to verify that the information that consumers are telling them is correct through smart use of data verification and analytics. Through better use of data analytics, insurers can underwrite risk more accurately, creating benefits for both insurers and consumers.”

He then went on to say that when applying for motor insurance, some consumers, “may not even realise that adjusting or omitting information can constitute fraud. There is a high risk for both parties, consumers could find themselves without cover in the event of an accident and insurers can find themselves exposed to unforeseen risk.”