Allianz has reported a ten% enhance in insurance coverage fraud, with ghost brokers, ‘crash for money’ scams and faux theft claims among the many commonest tendencies.
The insurer says it uncovered greater than 33,000 insurance coverage fraud instances in 2024, price over £157m. That is the equal of 90 frauds a day.
Whereas some examples of fraud are intentionally legal, others stem from policyholders telling white lies or stretching the reality when making use of for canopy.
Learn on to search out out why fraud is on the rise, and for our recommendation on trustworthy methods to get the perfect deal in your insurance coverage.
Bogus claims and dodgy scams
Allianz recognized quite a few tendencies involving policyholders and scammers being economical with the reality as a way to get cheaper cowl.
The insurer detected a excessive variety of ‘ghost brokers’. These will not be actual insurance coverage brokers, however criminals who promote non-existent or invalid insurance policies to victims.
It additionally reported drivers mendacity about accidents to assert on their automobile insurance coverage and moped riders or couriers faking accidents to make claims. That is sometimes called a ‘cash-for-crash’ rip-off.
One other frequent kind of fraud was the follow of recycling claims. That is the place one declare is declined, just for the claimant to try to declare once more in a barely totally different method.
Examples of insurance coverage fraud detected by Allianz embody:
- Two males intentionally staged a collision and falsely said the harm was price round £60,000. They went on to submit bogus claims on their insurance coverage. Inconsistencies raised alarm bells and the pair – together with a 3rd man – had been discovered responsible of fraud after a trial.
- A claimant struggling whiplash accidents following a automobile accident later went on to assert for dental therapy price £4,300 after claiming his face hit the steering wheel. The case went to trial and he ultimately dropped the declare and agreed to pay prices.
Why is fraud on the rise?
Automobile and residential insurance coverage premiums have steadily risen since 2022, hitting file ranges final 12 months. Worth rises are actually lastly easing, however current analysis by The Inexperienced Insurer suggests some persons are mendacity in a bid to cut back the price of their cowl.
A survey of greater than 1,000 drivers discovered 29% had taken to stretching the reality when making use of for insurance coverage. Of those, 63% both barely or considerably understated the variety of miles they drive every year.
Ben Fletcher, director of fraud at Allianz UK, says: ‘The overwhelming majority of claims are real, and our focus as a enterprise is to make sure we settle these promptly, however the unhappy actuality is that some folks will go to monumental lengths to make fraudulent claims.
‘The rise within the quantity of fraud may be attributed to a number of elements. The continuing price of residing problem and monetary struggles persons are dealing with is driving some folks to commit insurance coverage fraud.’
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What can occur in case you misinform your insurer?
At finest, mendacity to your insurer may see your declare rejected. At worst, your coverage could possibly be invalidated or – in critical instances – you may face fines, prosecution and a legal file. That is as a result of dishonesty, both when making use of for canopy or making a declare, counts as fraud.
In consequence, you may probably have your title added to the Insurance coverage Fraud Register. That is an industry-wide database of recognized fraudsters, utilized by insurers when making underwriting choices and assessing claims.
If you find yourself on the listing, you may battle with future insurance coverage and mortgage functions.
- Discover out extra: finest house insurance coverage 2025
Trustworthy methods to cut back prices
Insurance coverage costs is perhaps excessive, however the dangers of mendacity are merely not price it. Right here, we define methods to maintain the price of your premium down with out being dishonest.
1. Store round
It is a cliche, however seeing what different offers are on the market earlier than renewing or shopping for a brand new coverage is likely one of the only methods to safe decrease premiums.
Worth comparability websites comparable to Examine the Market, Confused.com, GoCompare and MoneySuperMarket help you view a number of automobile insurance coverage quotes at a look.
Not all insurers are on comparability web sites, so you may have to get quotes straight from them. Direct Line and NFU Mutual are examples of this.
2. Purchase early
Renewing early may prevent lots of of kilos.
With automobile insurance coverage, you may typically get a less expensive worth in case you purchase your cowl just a few weeks (moderately than just a few days) upfront of the coverage begin date.
Purchasing round early additionally permits you to totally analysis the market or negotiate your insurer’s worth to be sure to get the perfect deal.
- Discover out extra: the worst time of day to purchase automobile insurance coverage
3. Select annual cowl
Whereas paying for insurance coverage in instalments could make the prices simpler to handle, the curiosity charged on the month-to-month funds considerably impacts the quantity you may pay general.
If it is advisable unfold your funds, one various is to purchase cowl upfront with an interest-free bank card, and repay a twelfth of the steadiness every month.
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4. Do not routinely renew
By no means comply with the auto-renewal clause included in your insurance coverage settlement. Because of this as soon as your preliminary one-year contract lapses, you’ll be routinely enrolled for an additional 12 months on the worth the insurer quotes in your renewal.
As an alternative, use the perfect quotes you’ve got gathered to barter along with your insurer and take your new enterprise elsewhere if it would not enhance its provide.
5. Tweak the surplus
In the event you’re keen to pay the next extra, your insurer will provide a less expensive premium. Nevertheless, make certain to pick your extra fastidiously.
Setting the bar too excessive, particularly if it begins getting too near your claims restrict, would possibly make claiming in your insurance coverage both pointless or too costly.
6. Haggle for a greater worth
In the event you do not need to swap to a different insurer, you would possibly be capable to get the worth down by haggling.
Contact your insurer to ask if it could be ready to cut back its quote to maintain your customized.
It is going to assist in case you’ve executed a bit of buying round first, so that you may give examples of what its rivals are providing.
- Discover out extra: tips on how to discover low cost house insurance coverage
