One in four consumers would commit motor application fraud – LexisNexis

One-quarter of motorists think it is acceptable to mislead insurers to reduce their motor insurance premiums, according to a new study by LexisNexis.

In a survey of nearly 1,000 insured UK drivers, 40% believe the cost of their motor insurance is too high, and many are taking fraudulent measures to reduce their policy costs.

One in four (25%) think that omissions or adjustments of information is acceptable to reduce premiums when applying for motor insurance.

‘Acceptable’ lies

When it comes to deciding who is named as the main driver, 29% of respondents admit to ‘fronting’ their policy by naming someone other than the person who will drive the car the most. Factors influencing this decision include who has the main income (25%), a better driving record (12%) or who has historically had a lower cost policy (11%).

The research reveals that 13% think it is acceptable to use someone else’s address when applying for motor insurance, and that 15% think it is acceptable to try to change their number of ‘no claims discount’ years to achieve a better discount.

LexisNexis UK managing director Bill McCarthy said some consumers “may not even realise that adjusting or omitting information can constitute fraud”.

“This is a risk for both parties – consumers could find themselves without cover in the event of an accident and insurers can find themselves exposed to unforeseen risk,” he said.

Claims fraud still an issue

Attitudes to making a claim were also explored in the survey, with the research finding that one in five (20%) think it is acceptable to report a hit-and-run accident to claim for self-inflicted damage.

Fewer than one in 10 (8%) think it is acceptable to exaggerate the severity of a personal injury, such as whiplash, to increase the amount of money paid-out.

Telematics

In a positive sign, however, two-thirds (64%) of respondents said they were comfortable with a telematics type of product that would share information about the events leading to a traffic accident, to help insurers determine which driver was at fault.

McCarthy said: “One solution for insurers to help address consumers who are willing to mislead is to verify that the information that consumers are telling them is correct through smart use of data verification and analytics. Through better use of data analytics, insurers can underwrite risk more accurately – creating benefits for both insurers and consumers.”