Fair Investment

Car insurance fraud drives up excess charges

Insurance News Car Insurance Could Be Cheaper For Joshuas Than Jameses

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

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