One in Four UK Consumers Prepared to Commit Application Fraud for Cheaper Car Insurance
LONDON & ATLANTA--March 19, 2014: A quarter of insured motorists think that it is acceptable to mislead insurers to reduce their motor insurance premiums, according to a new study from LexisNexis.
Released today by LexisNexis® Risk Solutions, the research found that 40% of UK motor insurance policy holders believe the cost of their policy is too high, and many are taking fraudulent measures to reduce the cost of their policy.
The study, which explores consumer attitudes to motor insurance in the UK, uncovers that one in four (25%) think that some omission or adjustment of information is acceptable in order to reduce premiums when applying for motor insurance.
When it comes to deciding who is named as the main driver, 29% of people 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 just over 1 in 10 (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.
Bill McCarthy, Managing Director, UK, Insurance, LexisNexis®, said “some consumers are willing to mislead insurers in an attempt to obtain cheaper car insurance, and 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.”
Attitudes to making a claim are also explored, 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. One in 10 (8%) think that it is acceptable to exaggerate the severity of a personal injury, such as whiplash, to increase the amount of money paid-out.
In a positive sign that consumers are potentially willing to help insurers respond to claims more accurately, two thirds (64%) of people are comfortable with a telematics type of product that would share information about the events leading to a traffic accident, in order to help determine which driver was at fault.
“Whilst a quarter of people think it is acceptable to omit or adjust information when applying for car insurance, the majority recognise that this is unacceptable behaviour. 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,” said McCarthy.