posted 7 years ago

New Rules Minimise Insurance Fraud

Motor Insurance Companies To Cross-Reference Data With DVLA

The vast majority of motorists support the initiative to provide insurers with information from the DVLA Database if it reduces fraud, an AA Poll has confirmed. But how will this help? Thousands of drivers provide false statements to their insurance companies in order to reduce their premiums. Some therefore claim to live in low crime areas – perhaps with parents – but in fact reside in less secure parts of the country. Others exaggerate their experience by claiming to have (say) seven years behind the wheel when they only have three. Also, some fail to declare motoring convictions such as driving without due care and attention or reveal something less significant. The Secretary of State for Transport, Patrick McLoughlin MP, has therefore confirmed that from 2014 motor insurance companies will be allowed to cross-reference some of the information drivers provide with the DVLA Database (Driver & Vehicle Licensing Agency).

AA Responds To Survey Results

AA Insurance Director, Simon Douglas, said: “This shows that drivers are fed up with a fraudulent minority trying to get cheaper insurance by telling lies at their expense. We know that an astounding quarter of motorists wrongly declare their driving history to insurers either not declaring convictions or disqualifications, or declaring something less significant. Many more provide other false information such as age, driving experience or even address in order to obtain a cheaper insurance premium. This is unfair to safer, honest motorists.” Mr Douglass concluded: “It’s hard to think of a change to the insurance process that has been given such resounding support from the public.”

Results of AA Poll

The AA surveyed 17,883 of its members to seek their views on this insurance fraud initiative. 92% of the respondents said it is “a good idea if it cuts down fraud” and 91% were in favour if it “helps bring down premiums”. I suspect, however, that any savings will be swallowed by insurers rather than passed to consumers. Furthermore, 84% claimed it is “necessary because people give false information to try to cut premiums”, and 79% said it is a “good idea” if it “cuts out lots of questions”. After all, insurers will not have to ask how long drivers have held licenses or whether they have convictions. But not everyone is in favour of the initiative. As such, 22% said they “object” to their data being given to insurers and 64% “worry” that it could be “used for other purposes”.