The subject of insurance scams is vast and of substantial importance. massive amounts of money are involved annually. These amounts can be reckoned as net losses since the cost to the law-abiding public remains inordinately high. Here, we aim to enlighten beginners who have taken out their first insurance policy about the institutional safeguards available. UK agencies are more vigilant than ever before, making life a veritable hell for unmitigated criminal fraudsters who would not take the honest road to life. Naturally, there are certain steps that you would be taking on your own, for your own security. However, it is no small solace that a host of official paraphernalia is firmly in place, to help us honest folk. These measures and hints help us avoid fraud. Without further ado, let’s dive right in, into the avoiding of insurance scams.
Anti-fraud caveats: Institutional steps/measures that actively discourage insurance Scams
Insurance Fraudsters Are Unmitigated Criminals
Insurance fraud is a reprehensible crime that can precipitate serious consequences for fraudsters who may find their future job prospects affected. Furthermore, they may find it harder to obtain insurance and other important financial services, are awarded a criminal conviction and even face the possibility of imprisonment. Also, insurance fraud is often used to fund the peripheral activities of criminal gangs, which may be linked to serious organised crime like drug dealing, burglary or terrorism.
Insurance Scams Is Harmless
Insurers run up costs in scrutinising suspected frauds, which also affects their ability to handle honest claims quickly. For true blue customers, this ultimately causes higher premiums. Insurance fraud is also known to fund and empower other serious crimes such as money laundering and, in not a few cases, like staged motor crashes, puts people’s lives in jeopardy.
Insurance Fraud Is Not Easy To Commit
Tackling insurance fraud is still a central priority for the insurance industry, and insurers keep on strengthening their systems and controls against various kinds of fraud. Nonetheless, opportunistic fraudsters, who do not give proper consideration to the risk factors and concerns about getting caught, often suffer a surfeit of consequences beyond the sentence they receive. These include an antagonistic family reaction, financial aftermath, and the stigma involved in being branded an offender.
An Insurance Scams Does Have Serious Consequences
Committing insurance fraud will have long and severe fallouts. Fraudsters are liable to face criminal prosecution and a prison sentence. At the very minimum, they can expect to find it harder to get and pay more for insurance in the coming days. Documented fraudsters may also find it harder to get credit and other financial products in the future.
Saving Money On Insurance By Having It In Someone Else’s Name Is Not Legitimate
If you are economical with the truth, and declare a ‘named driver’ as the ‘main driver’ to bring the premium down since they are a lower-risk driver than you, you are still committing a kind of fraud known as ‘fronting ‘.
The Police Does Act-On Insurance Scams
In the UK, a specialist police unit has been set up to tackle insurance fraud. The Insurance Fraud Enforcement Department (IFED) is funded by the Association of British Insurers and Lloyd’s of London. It is dedicated to making the country an antagonistic environment for people who commit insurance fraud.
Application Form Lies Are Uncoverable
In case you fail to disclose or misrepresent information at the application stage, this is insurance fraud. Even just making a few ‘tweaks’, like declaring your car is kept on a driveway when it is in fact kept on the road, could be sufficient to cancel your policy. If this sees the light when you make a claim, you could find that the pay-out is limited or that your policy is declared null and void.
Fraudulent claims are uncoverable
Responsible insurers are devoted to doing everything they can to detect, disrupt and prosecute anyone trying to ‘manufacture’ a claim. Insurers are becoming more and more effective at sharing intelligence and information to tackle and prosecute fraud at any level. Highly evolved analytical software helps insurers presciently identify cross-industry patterns and issue the ‘heads-up’ to the industry as regards fraudulent networks.
Insurance Fraud Bureau
The Insurance Fraud Bureau or IFB can be contacted through their website contact form.
IFR or Insurance Fraud Register
The IFR is the first industry-wide database of documented insurance fraudsters. It is the most current step in the ongoing battle against insurance fraud.
The IFR is a robust, secure and effective tool, developed for the insurance industry to help stall and detect fraudsters.
The IFR aims to protect honest customers and keep down the cost of insurance.
The Association of British Insurers (ABI) is the sponsor of the IFR on behalf of its members. The Insurance Fraud Bureau is managing the IFR in partnership with the ABI.
- Association of British Insurers
- One America Square
- 17 Crosswall
- EC3N 2LB
What is insurance Scams?
Insurance fraud is a censurable criminal offence. More than £2.1bn of undiscovered insurance fraud is committed every year.
Insurance scam has its finger in every type of insurance and ranges from opportunists failing to disclose their claims history when applying for cover . The same may also be exaggerating claims by adding extra items to a genuine claim to highly organised ‘crash for cash’ crime rings. The latter often come up with dangerous road accidents and claim for ghostly passengers and fictitious injuries. Not the least, insurance fraud may be committed by the policyholder or a third party claiming against an insurance policy.
How the IFR helps shield honest customers
Insurance fraud affects customers, insurers and society in general. All customers end up paying for the dishonesty of a few through higher insurance premiums. The IFR is pledged to protect the honest customer against insurance scams by helping to:
· Make it harder for insurance fraudsters to engage in criminal activity
· Make it simpler for enforcement agencies to detect and identify fraudsters
· Keep the insurance premiums cost down for honest customers
Rolling out the IFR
The IFR went live at 2013-end. It is now available to 300+ insurers who are ABI-members. Over 80% of the general insurance market (by market share) is currently making use of the IFR, and work is ongoing to onboard a goodly proportion of the remaining market.
The Association of British Insurers (ABI) is the sponsor of the IFR on behalf of its members.
The ABI is the voice of insurance, standing up for the general insurance, investment and long-term savings industry. It was formed in 1985 to represent all of the industry and today has 300-plus members, responsible for some 90% of premiums in the UK.
The Insurance Fraud Bureau (IFB) manages the IFR on behalf of the ABI.
The ABI set up the IFB to disrupt and coordinate action against people committing organised insurance scams. The IFB is a not for profit organisation funded by the insurance industry, particularly focussed on detecting and preventing organised and cross-industry insurance fraud.
For more information on the IFB, visit wwww.insurancefraudbureau.org.
Driver & Vehicle Licensing Agency
Avoid Mistakes And Potentially Save Money When Purchasing Motor Insurance
MyLicence, Driver & Vehicle Licensing Agency initiative, will permit insurers to offer you a motor insurance premium using the most current and accurate information, removing the possibility of inaccuracies or fraud during the application process. As a result, you would be accessing the most competitive premiums and enjoy the confidence that your policy is backed by the right details.
By permitting the DVLA to offer the data, you’ll be doing away with the opportunity to make mistakes and ensuring that the requisite information is passed on to your insurance provider to offer you the best quote in town.
You could be paying the wrong premium without feeling it: the ABI has estimated that honest drivers who permit insurance providers to use their licence number through MyLicence could save close to £15.
1. Giving the short shrift to mistakes and reducing insurance scam: the data has its provenance in the DVLA database
2. Avoiding the likelihood of named drivers on your policy giving wrong information
3. Giving you access to competitive premiums, and the chance to save your money with insurers
4. Streamlining the purchasing process: does away with the need to send away the paper copy of your driving licence to your broker or insurer
5. Precise policy information implies fewer declined or adjusted claims.
Over time MyLicence will mean customers are asked fewer questions when purchasing insurance. For example, you won’t need to fill out questions about your driving entitlements or convictions or have your motoring history to hand. Just using your driving licence number would be sufficient.
What the Driver and Vehicle Licensing Agency does
The Driver and Vehicle Licensing Agency (DVLA), in possession of 49 million-plus driver records and 40+ million vehicle records collect close to £7 billion a year in vehicle excise duty (VED).
Sponsored by the Department for Transport, DVLA is an executive agency.
As we have just seen, a panoply of official measures vouchsafes a better environment for the honestly insured. The material outlined above seeks to reassure you that the Law has your back, even in the preventative sense. However, you can keep adding more steps to this list of measures that can be adopted in the ongoing struggle against that plague, the ‘insurance scams’.
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