Could You Be Committing Insurance Fraud Without Knowing It?

Could You Be Committing Insurance Fraud Without Knowing It?

It’s easier than you think to unintentionally commit insurance fraud on your motor trade insurance policy, even minor slips such as forgetting to update your new address or modifying your vehicle could all lead to the possibility of a claim being rejected.

Here are just some areas that will help you to stay on the right side of the law and keep your insurance broker happy.

Common Types of Insurance Fraud

The Association of British Insurers (ABI) has just updated its annual report into fraudulent insurance claims, with a record-breaking 107,000 fraudulent insurance claims worth £1.2 billion uncovered by insurers in 2019. That works out to be a new scam revealed every five minutes of the day.

Of these fraudulent claims – up 5 percent on 2018 – the rise was mainly credited to increases in motor and property scams. Motor insurance frauds remained the most common, up 6 percent in number to 58,000 on 2018, with 75 percent containing a personal injury element.

One such claim was by a police officer who was convicted for a motor fraud valued at £10,000 after he was incriminated by his own dashcam footage. The camera showed debris from a passing van that was alleged to have caused him personal injury. However, the damage to his car turned out to be polystyrene.

Whilst the majority of road users would never attempt to commit fraud on this level, there are many ways in which you could be on the wrong side of the law just by not being clear on a policy application or forgetting to let your broker know when your data changes.

Here are some of the issues you should be aware of when taking out a motor trade insurance policy:

  1. Fronting

    Whilst many may not even know what fronting means, this is by far the most common type of consumer fraud in the UK. The term is used when a vehicle owner intentionally misleads about who the main driver of the vehicle is in order to reduce their vehicle insurance quote. This is illegal but research by the AA found that half of the population in general and 60 percent of 17 to 22-year-olds felt it was acceptable to take out a policy in this way.

    If you are found fronting, the person driving the vehicle would no longer be insured and it will reduce your chances of being accepted for any type of insurance in the future. For anyone looking for van insurance, this could significantly increase your premiums.

  2. Change of Circumstances

    All motor trade insurance or fleet insurance premiums are calculated on a number of factors including where your business is located, type of business, your home address, where the vehicle is parked at night and vehicle usage. If any change, such as your business changing location, or employees parking vehicles in different addresses at night, you need to inform your insurance broker.

  3. Declaring Modifications

    It’s quite likely that if you own a fleet of vans, they will need some form of modification. Making any changes to your fleet after you have agreed your van fleet insurance policy will need to be updated with your insurance broker.

    Some modifications can affect your premium in a positive way including the installation of security alarms, anti-theft equipment or telematics. For further information on van modifications, see our blog Van Modifications – Keeping You Insured.

  4. Not declaring convictions

    There are times in most driver’s lives when they end up on the wrong side of the law, generally due to speeding. Penalty points can remain on your licence for up to 11 years in the case of a serious offence and 12 points accrued over three years will lead to disqualification.

    It’s an offence under the Road Traffic Act 1998 if you don’t tell your insurance broker that you have received points. Some insurers only ask you to do this at renewal time, but others may expect you to tell them as soon as you receive the conviction, so check your terms and conditions. If you don’t declare your points and then you make a claim, your insurer could refuse to pay out.

 

There are times in most driver’s lives when they end up on the wrong side of the law, generally due to speeding. Penalty points can remain on your licence for up to 11 years in the case of a serious offence and 12 points accrued over three years will lead to disqualification.

It’s an offence under the Road Traffic Act 1998 if you don’t tell your insurance broker that you have received points. Some insurers only ask you to do this at renewal time, but others may expect you to tell them as soon as you receive the conviction, so check your terms and conditions. If you don’t declare your points and then you make a claim, your insurer could refuse to pay out.

If you have any concerns regarding updating or renewing your motor trade insurance policy, give Tradex a call on 0333 313 1111.

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