No Deposit Car Insurance

Car insurance fraud, and how it is detected

According to the Association of British Insurers, 180,675 fraudulent motor insurance applications were identified in the UK during 2013. It has been estimated that, without this burden, motor insurance premiums would average about £15 less (the figure is £50 per household across all types of insurance).

Minor and serious fraudulent applications - motoring convictions

Types of dishonest practice range from relatively minor omissions of relevant facts to serious misrepresentation. It is believed that at the moment, nearly one in five policyholders fail to declare the number of motoring convictions they have when applying for insurance.

Some other types of fraudulent application

In addition to omitting convictions, applications may misrepresent the truth when, for example, a parent pretends to be the main driver of a car instead of their son or daughter, in a practice known as 'fronting'. Sometimes the applicant falsely pretends to have a no-claims bonus, or lies about the way a car is used or where it is kept.

Detecting motor insurance fraud; using computer technology to share information

Motor insurers are seeking to reduce this unfair load on honest motorists, by techniques including checking applications against the official motorist database, and by using a shared fraud database.

Mylicence - a brand new system for detecting undeclared convictions

One of the most common types of fraudulent motor insurance application occurs when motorists fail to disclose motoring convictions. Starting this year, under a new joint initiative by the insurance industry with the DVLA and the Department for Transport, motorists applying for insurance will be required to include their Driving Licence Number (DLN) on the application. The DLN is the unique 16-character identifier which appears on the driving licence.

Verifying licence information and convictions

The insurance company will be able to use the DLN to access information from the Driver and Vehicle Licensing Agency (DVLA), so that as long as the information on the licence is correct, the insurer can obtain accurate data on the type of licence a customer has and how long they have held it, and also, the type and date of any driving convictions.

Advantages for honest motorists

In addition to reduced premiums as a result of Mylicence, honest motorists should also benefit from a reduction in the form-filling involved in applying for motor insurance, as insurers will be obtaining some of the necessary information directly from the DVLA.

The Insurance Fraud Register

Since it went live in 2013, the Insurance Fraud Register has been helping insurers to spot dishonest customers. Sponsored by the Association of British Insurers, the aim of the IFR is to coordinate action against people committing organised insurance crime.

How organised crime affects motor insurance

By sharing information through the IFR, insurers are able, for example, to spot multiple claims made by gangs staging accidents for profit.

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