The AA has reported that due to the increased number of fraudulent claims, car insurance premiums have increased 11.5 per cent over the last 90 days. The average price of a normal, comprehensive coverage, car insurance premium for the year is just over 700 pounds. This cost has increased more than 30 per cent over the last 12 months. It is quite possible that the basis for the increase in premium is comparison websites encouraging fraud.
Simon Douglas, director of the AA, said that insurance companies have to compensate for the possibility of fraud, due to websites making it possible to provide inaccurate information at the onset of acquiring insurance policies.
He commented on how dishonest applicants could manipulate information, saying: “The growth of price comparison sites has encouraged fraud, although most people wouldn’t see it as such. It is much easier to manipulate information on a computer screen to find the cheapest price – for example, by changing the facts about past driving experience, than attempting to do so in a conversation with insurance sales staff.”
He also warned: “Those who are caught will find it extremely difficult and expensive to find an insurer willing to take them in the future.”
Industry insiders have reported this unsettling piece of data; for every 100 pounds paid in premiums, 122 pounds have been paid out.
Paul Lawler, spokesman for Moneysupermarket.com, disputed the AA claims, saying: “Like all players in the insurance industry, we monitor every application that is submitted by a user on our website and the details are kept on record. If they then reapply with drastically different information, we are notified.”
He added, with emphasis on what he felt really was to blame for increased premiums, saying: “The rise in ambulance chasers and personal injury firms is what is causing the increase in premiums.”