How Insurance Fraud Affects you

If you have tried to renew your home or car insurance recently you may well have noticed insurance premiums starting to increase. One of the main contributing factors in this increase is a rise in fraudulent insurance claims.

Fraudulent claims are made mostly on home and car insurance policies and according to the Association of British Insurers false claims cost UK insurance companies some £1.6billion a year.

So how does this affect you? While insurance companies have indicated a commitment to tackling the issue the fact remains that the problem costs them around £4million a day. This loss has to be recouped in some way and in many instances is passed onto the consumer. You are effectively paying for the fraudulent actions of other people; on average the impact of fraudulent claims adds around £40 onto your insurance premiums.

When it comes to car insurance you are effectively being hit with a double whammy. Not only are you paying for other peoples fraudulent activities but you are also paying to cover the UK’s growing number of uninsured drivers.

With these two factors forcing up the cost of car insurance it is no surprise that some people are noticing a rise in their premiums. These price increases are commonly found in the renewal letter sent by your insurance company.

However, rather than simply accept the increase you have the option to act and switch you car insurance to another provider. The car insurance market is fiercely competitive with companies eager to increase their customer base. You, the customer, can use this to your advantage. An online search for car insurance can quickly illustrate the possible savings you make by moving to another insurance company.

If, like many other honest individuals, you are unwilling to pay for other people’s insurance fraud you can put pressure on your insurance company by switching your motor insurance to another provider. You could even make a worthwhile saving in the process.