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Fraud adds £50 to the cost of car insurance

Insurance cheats inflate the price of policies

Fraudulent insurance claims 'add £40 to premiums'

Fraudulent insurance claims ‘add £40 to premiums’

Honest drivers are forking out £50 every year to cover the cost of accidents caused by fraudulent and uninsured drivers, a new report has claimed.

According to The Co-operative Insurance, car insurance claims brought against illegal drivers cost the industry £1.25bn a year – and the expense is shared out among motorists who willingly pay their premiums.

More than 23,000 people are injured or killed by uninsured drivers each year, The Co-operative Insurance says. This is taken into consideration when companies calculate the price of car insurance policies, and the risk posed by fraudulent and uninsured motorists is a key reason why the cost of cover continues to increase.

Car insurance for younger drivers

Elsewhere, The Co-operative’s research shows that 23% of young people have admitted to driving illegally over the past year – without either insurance, a valid MOT or even a driving licence.

Driving without insurance is illegal and, if caught, a driver without cover faces having their vehicle seized by the police, a £200 fixed penalty notice and having six penalty points added to their licence.

If the confiscated vehicle is not subsequently collected by the driver, who must present a valid car insurance certificate before it is released, it may well be sold on or crushed.

Car insurance fraud and illegal motoring are problems often associated with younger drivers, because the huge cost of insurance policies for young people means some simply cannot afford to buy cover. Which? car insurance expert Dan Moore says: ‘Driving without insurance is inexcusable, and common forms of insurance fraud – such as fronting – are also dangerous and against the law. However, when it comes to the specific issue of younger drivers, the industry needs to come up with a solution that means under-25s have access to affordable car insurance cover.’

Protecting yourself against uninsured drivers

If you’re concerned about being hit by an uninsured driver, it pays to ensure your own insurance policy would protect you in this situation.

A fully comprehensive insurance policy will offer you some protection should the worst happen, but you would not be able to claim against a third party, fire and theft policy. However, some people with fully comprehensive car insurance would still lose their no-claims discounts in they event they had to claim against an ‘unknown’ or untraceable driver – so if you’re unsure, it’s important to check the terms and conditions of your policy.

For more information on how to protect yourself against uninsured drivers, listen to the 28 July 2010 episode of the Which? Money weekly podcast. Meanwhile, if you’re looking for a car insurance policy that offers high quality cover as well as affordable premiums, check out the Which? recommended car insurers page on our new-look website.

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