Go compare with our comparison table

Car insurance fraud drives up excess charges

19 October 2009 / by Andy Davies

An increase in fraudulent car insurance claims in the past year has forced providers to increase the cost of compulsory excess payments for honest drivers by 32 per cent, according to uSwitch.com.

Research by the comparison website has revealed a 44 per cent rise in fake motor insurance claims, as the car insurance industry now foots a £1.9billion fraud bill.

Consequently, uSwitch states, the average compulsory excess payment has risen by 32 per cent from £129 to £170, and 85 per cent of drivers involved in an accident would have to pay this charge.

This increase could amount to £154million being recouped by the car insurance industry in the next 12 months as more than 4.4 million claims are made each year.

Meanwhile, many drivers who make a claim will also have to foot a voluntary excess charge adding an additional £197 to the average claim.

Further analysis has revealed that the average policy price has increased by 10 per cent since last year from just under £480 to around £526 for comprehensive cover, while third party cover has seen a 13 per cent increase.

Disappointed by this news, Mark Monteiro insurance expert at uSwitch.com, said: "Hiking hidden charges and exploiting consumers who don't have the time or the inclination to scrutinise the policy small print is really sneaky in such a tense economic climate."

Mr Monteiro continued by saying many people will be unaware that they could be hit with two excess charges. This provides "an easy way to generate revenue" for insurance providers, he said, but added that "consumers do have a responsibility to read the small print when they take out a policy".

As well as policy increases, Mr Monteiro states drivers are also having to cope with the recent two pence duty increase in fuel prices and urges drivers to "shop around every year for their car insurance" to get a better deal.

"Providers rely on repeat renewals as the most competitive prices are often only offered to new customers," he said.

© Fair Investment Company Ltd

 

ProviderSpecial OffersGet Quotes

5 Star Car Insurance from £196* - You could save up to 20% online.
10% of customers are expected to receive the maximum saving.

Get Quotes >
Save up to £1,096 on Car Insurance.

10% of consumers could achieve this saving. Based on online independent research by Consumer Intelligence during 01 March -31st March 2017. Underwritten by U K Insurance Ltd

Get Quotes >

97% of customers would buy again from LV= (verified by Reevoo)

Benefits include UK call centres, 24/7 claims helpline, unlimited cover for factory fitted phone, audio and sat nav equipment, and replacement child car seats. Plus optional extras, such as motor legal expenses, guaranteed courtesy car, European car insurance cover, increased personal accident cover and breakdown cover.

Get Quotes >

Don’t get caught out when you break down. Churchill offers free breakdown cover to new Motor customers
First year Breakdown service (roadside only), provided by Green Flag, new policies only. Excludes N.I. Breakdown chargeable at renewal. Underwritten by U K Insurance Limited. Terms & conditions apply

Get Quotes >

Save 15% Online††
No claims discount up to 75%.

Get Quotes >

Comprehensive cover available from just £152 a year**.
5 Star Rated Comprehensive Cover, you'll benefit from the following as standard: Uninsured driver cover, Vandalism cover, Guaranteed replacement car, Emergency any driver cover, Cover for driving in the European Union for an unlimited period.

Get Quotes >
New customers can get 12 months' breakdown cover for the price of 6 when they buy AA Car Insurance. You also get access to member benefits, including up to 20% off at Moto service areas. Get Quotes >

Get Comprehensive Car Insurance Quotes Online.

Get Quotes >
Free Annual Roadside Assistance and Recovery Breakdown Cover worth £49.
Over 50s save at least £50.
Get Quotes >
With lots more cover now included as standard, AXA car insurance offers you extra reassurance on the road.
If your car’s hit by an uninsured driver, you’ll keep your no claims discount and get back your excess with AXA’s uninsured driver promise* – only with our comprehensive car insurance (*We will return any No Claims Discount and Excess if you are not to blame – you will need to provide the make, model and reg number of the other car. T&Cs apply.)
Get Quotes >
Confused.com compare prices from over 130 motor insurance providers to find you their best dealGet Quotes >
Save up to £230 on your car insurance (51% of consumers could achieve a saving of up to £229.96 with Gocompare.com car insurance based on a comparison of at least 40 companies)Get Quotes >