Motor Insurance Fraud – will your premiums suffer?


A secret list of the worst areas for motor fraud has been revealed – and it shows that in some areas of the country where insurance fraud is rife, it’s the honest drivers who are penalised.

Every year a law firm which specialises in investigating suspicious claims on behalf of insurance companies publishes a list of the worst areas for fraudulent claims. But it also, secretly, provides insurers with more exact details relating to the worst postcodes. And it’s this list, not usually made public but obtained by a national newspaper, which quite literally turns motor insurance premiums into a postcode lottery.

Fraudulent road accident claimsIt’s said that this ‘fraud epidemic’ is behind the record 40 per cent rise in premiums over the last 12 months, with annual comprehensive policies set to be over £1,000 within the year.

Fraudulent claims cost insurers around £2.7billion each year, with common frauds including staged accidents where criminals force other motorists to crash into them. Then there are false claims of injuries such as whiplash, and a practice called ‘fronting’ where parents claim they are the main driver of a car to cut insurance costs for their child.

Accounting for more than four in ten suspicious claims are areas in the cities of London, Manchester, Liverpool and Birmingham and the towns of Bolton, Blackburn, Southall and Oldham. Surprisingly, it is Birmingham rather than London which comes out as the top ‘blackspot’, with the postcode B8 boasting almost 13 per cent of suspicious claims whilst the B15 postcode in the city clocks up just 1 per cent. This clearly shows how motorists just in that one city can face postcode discrimination when applying for insurance.

Other ‘fraud blackspots’ on the rise include Newcastle, Peterborough, Preston and Chester, showing that motor insurance fraud is certainly not confined to the country’s more heavily built-up areas.

What this means for drivers who have an unblemished claims record is that they can struggle to find affordable insurance , or might even be refused cover if they live within one of the blacklisted postcode areas. Some drivers have seen their insurance premiums double and Graeme Trudgill of the British Insurance Brokers’ Association says: "As with flooding, there are certain areas that insurers are just not keen on. We’ve heard of rates in some parts of Birmingham tripling."

Whilst the insurance industry says it is doing everything possible to crack down on insurance fraud, some of the big names do admit that they refuse cover in certain areas.

So, as ever, it’s the law-abiding citizens of England who will pay the price for this new insurance fraud epidemic.

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