AA Insurance Leads the Call for a Clampdown on ‘Crash for Cash’ Collisions

We all require car insurance to legally drive on British roads and many of us will only use it in the unfortunate incident of being involved in a car accident. However, a large number of people are staging collisions with the aim of collecting insurance payouts.

It is a practice that involves causing an accident at junctions, roundabouts or other busy areas, with some drivers disabling rear lights so that the driver behind might collide at low speed with the vehicle.

The practice encouraged the Metropolitan Police to target such ‘crash for cash’ insurance scams and now AA Car Insurance is calling on other police forces around the country to follow suit.

In 2008, fraudulent car insurance claims amounted to a total of £730 million and when the additional £1.9 billion that slips through the system is taken into account this is an enormous sum. In fact, it is adding £44 to the average cost of all insurance policies.

Simon Douglas, of AA Car Insurance relays the story of a man from the North West of England who indulged in a frenzy of ‘crash for cash’ collisions, which resulted in £1.9 million of fraudulent insurance claims.

“I’m certain that with better surveillance and co-ordination between insurers and police, that orgy of crime could have been stopped earlier,” he adds.

They cite Detective Chief Inspector Nick Chalmers of the Metropolitan Police, who points out that pretty soon someone could be killed by the activity.

However, the manner in which the scams are carried out means that there are inevitable victims even if no-one is killed. After a staged collision: “The fraudster subsequently makes claims for personal injury (usually whiplash) from his passengers who may not have been in the vehicle at all,” Douglas says, “The hapless victim, meanwhile, has to suffer the inconvenience of getting his car repaired and is likely to lose his excess and no-claim bonus.”

2009 has seen a 30% rise in the amount of fraudulent insurance claims in the last year, according to AA Car Insurance. As a result, it warns drivers to be vigilant and to keep a safe distance from the vehicle in front to avoid becoming involved in such a scam.

Source: AA Press Release Dec 2009

Study Reveals Large Numbers Faking Injuries for Compensation

There have often been references to the rising ‘blame’ culture in the UK, which has been linked with the various adverts cropping up on our television screens advertising services to help people claim compensation on personal injuries.

However, one area that this could be affecting is car insurance; that is if we take the rise in faking injuries into account. According to research from the insurer LV= Car Insurance, GPs have reported an increase in the numbers of people faking injuries or illnesses in a simple effort to claim compensation. As many as 98% of General Practitioners that were asked said they had seen a patient at some point who was exaggerating their injury for compensatory purposes.

In addition to this figure, 85% of GPs said that they had seen someone they felt was completely making up their story for the same reasons.

Whilst the ongoing recession has been cited as the cause of this rise, the UK’s ‘blame’ culture has also been drawn on as a source for the problem, with 70% of doctors feeling that this is the reason.

But how does this relate to car insurance? 88% of GPs have claimed that whiplash is the most likely form of injury for someone to ‘try on’. However, this does not just affect the insurance companies, or the person if they are caught; this has a knock on effect for the consumer as well, with whiplash compensation estimated to account for around 20% of everyone’s car insurance premium.

For the individuals that are felt to be making a fraudulent claim, they could land themselves a criminal record, with other consequences including the possible loss of their job or the threat of a three year prison sentence.

“People may see making up an injury as a result of a car accident as a harmless crime and a quick way to make money,” says Martin Milliner of LV= Car Insurance, “but if they are allowed to get away with it all car insurance premiums would be pushed up which is unfair on the honest motorist.”

However, before anyone with a genuine claim feels uncertain about their condition, he also adds “Clearly anyone who has a genuine injury as a result of an accident that wasn’t their fault, and loses out or can’t work as a result of it, is entitled to compensation.”

Churchill Car Insurance Reveals the Answers from their Claims Data

Across the country there are people from many different disciplines that might not be aware that there is a difference between their own motoring habits and someone from a different profession.

However, according to results found from Churchill Car Insurance’s claims data, computer engineers come out on top as the motorists with the worst accident records, with a higher frequency of claims than any other profession. It also found that the drivers with the lowest claim frequency were farmers.

It suggests that there could be a link between the profession that someone is involved with and the likelihood of being involved in a car accident. As well as Computer Engineers, the top ten most frequently claiming occupations consisted of Sales Managers, Chefs, Students, Doctors, Estate Agents, Surveyors, Customer Advisors, Hairdressers and Social Workers.

On the other end of the scale, the lowest number of claims came from Aircraft Fitters, Stores Personnel, Ambulance Drivers, Laboratory Technician, Pilots, Caretakers, Agricultural Engineers, Green Keepers and Mechanical Engineer.

The results could suggest why certain professions have more accidents as well, with those suffering more accidents in more stressful occupations in urban areas. On the other hand, those with less accidents tend to be more rural (in the case of farmers) or working in jobs that require a greater skill behind the wheel or with reactions times (such as pilots or ambulance drivers).

Tony Chilcott, the Head of Churchill Car Insurance agrees, pointing out that “The poorer claims experience associated with computer engineers, sales managers, chefs and doctors most likely reflects the long hours they work in a very stressful job.

“As a result, they are more likely to be tired when driving and possibly distracted.

“Conversely, those who have jobs which involve working outdoors or who drive for a living tend to have fewer accidents.

“Farmers have a lower claims frequency because they live and work in rural areas with less congestion, which are likely to be more tranquil to work in than a stressful office environment.”

So perhaps the choice of profession really does affect our driving after all?
Source: Churchill Press Release

The UK Hotspots for Cheap and Expensive Car Insurance Revealed

Though motor insurance is compulsory, it still pays to shop around and find the best deal, but in some cases motorists could be held back by the location in which they live.

New research from the price comparison website MoneySupermarket.com reveals the UK hotspots for the cheapest and most expensive car insurance quotes, with the figures showing Scottish motorists generally paying less.

The cheapest area in the UK for motor insurance is Truro in Cornwall, according to the results, but Scotland makes up six positions in the top ten, with areas in Dunfermline, Glenrothes, Dundee, Aberdeen, Grangemouth, Elgin and another part of Dundee all making appearances.

The figures are based on the postcodes of car insurance quotes, which is why Dundee appears in the top ten twice.

After Truro at number one, English locations only appear a further two times in the top ten, with sixth place going to Bury St Edmonds in Suffolk and ninth place going to Penzance in Cornwall.

The most expensive places in the UK for car insurance were Manchester and Birmingham, with Liverpool, Bradford, London and Belfast also appearing in the top ten most expensive postcodes.

Motorists are encouraged to take on a range of methods to bring down the cost of their car insurance, including shopping around, looking online, driving less, driving safely, adding an older or more experienced driver to the policy, driving a smaller engine car and ensuring cars have adequate security.

Steve Sweeney, the head of motor insurance for MoneySupermarket.com commented on the results, pointing out that it is good that those in the top ten can get cheaper car insurance,

“Of course it’s no surprise to see urban hotspots such as Manchester and Birmingham topping the chart for the most expensive postcodes, where motorists could see the cost of their cover double.

“An array of factors can determine the price you will pay for car insurance, from crime and population levels in your area, to where you park your vehicle.

“If premium costs were evaluated on a case by case basis, many motorists would receive quotes at a better price to match their individual circumstances.”

Source: MoneySupermarket.com Press Release Dec 2009

18% of Drivers Think They Deliberately Confuse

It is not uncommon to find insurance policies confusing; just like any form of financial transaction, they can be highly complex and encompass a range of different avenues and clauses.

However, a new survey has been released by SwiftCover.com that reveals some surprising feelings held by the British public in regards to car insurance.

Their study showed that 18% of British Drivers, amounting to almost 1 in 5, not only believe that car insurance is confusing, but that they are purposely designed to be so.

A similar number of people also said that they did not bother to check the small print on their car insurance, revealing one of many surprising practices undertaken by the British motorist.

Anyone seeking insurance is regularly encouraged to read the small print of insurance policies, particularly as such issues could make the difference between a good insurance policy that suits their needs, and a bad one that could leave someone out of pocket.

In response to the findings, SwiftCover.com has offered a new online service to help people make sense of policies people look at, with a jargon buster dealing with some difficult-to-interpret words.

As part of their study they asked people what they thought about certain words and found that a lot of people do not understand words or phrases such as ‘material fact’ (information you hand over to the insurer that might affect the policy). Another misunderstood term was ‘fully comprehensive’, with some believing this to mean that they can drive any car, with others thinking anyone could drive their car.

“Some drivers struggle with the terms used in their insurance,” said Tina Shortle of SwiftCover.com, “but it’s vital that they read and understand their insurance policies so they know exactly what they are covered for. SwiftCover.com’s online Jargonbuster makes insurance terms clearer and ensures drivers get the right cover and best value insurance for their needs.

“Car insurance is very complex, so this means that the wording used in policy terms and conditions can be fairly complicated.”

So anyone worried that they do not understand car insurance can at least know that they are not alone, though the advice is to always read the small print, so that everyone knows what they are covered for.

Source: SwiftCover.com Press Release

Insurers Give Out Advice to Motorists in face of Gale Force Winds

Each year people across the UK face the problems of extreme weather with home owners being urged in particular to make sure they have home insurance to cover them in the worst of situations.

However, car owners are being urged to take great care as well, with insurance providers expecting a surge in insurance claims associated with weather-related incidents

Due to car insurance’s mandatory nature, insurers are not urging car owners to seek insurance in the same way that home owners are urged to seek cover (though of course car owners should certainly ensure they have insurance). Instead, insurance providers are highlighting the risks faced by drivers as they head out on motorways this winter.

The Institute of Advanced Motorists are warning of winds of up to 75mph during weekends in November, which could cause great difficulty to drivers on motorways.

As a result, they urge motorists to slow down in light of high winds, reducing the effect of side winds. It warns drivers to keep their distance from other road users, leaving an appropriate gap between cars in front. Extra care should also be taken when overtaking large vehicles and motor bikes.

The severe gales that motorists have seen in November 2009 are not just a threat to motorists of high-sided vehicles, the IAM warns, with all drivers at risk from such conditions.

But they also urge extra care during flooding, which could also lead to drivers making a claim on their car insurance, “Not only are strong side winds and rain predicted, there will be the inevitable local flooding that follows from drains blocked by leaves. These conditions can challenge even experienced drivers” warned Peter Rodger, Chief Examiner of IAM.

With flooding, clearly the best advice is to make sure you do not enter it unless you can see the way out and if the water is too deep, then drivers should not risk it. In addition, revs should be kept high by using low gears as there is a risk of water entering the exhaust.

The IAM is a charity that urges driver to take extra care on the roads and actively campaigns for better driving skills amongst the British public.

Different Sources Cite Difference Changes

The RAC, in a new press release, has announced that the cost of motoring for British drivers has fallen by 5% in 2009, with an average reduction of £123. However, according to Sainsbury’s Finance, this is not so.

According to Sainsbury’s Car Insurance, the average annual cost of running a car has increased by 2.68% when compared to the year before, with the figures rising to 11% when compared to 2007.

The leading insurance provider says that the most noticeable cost increase has arisen due to car insurance. This is an area that the RAC and Sainsbury’s can at least agree on, with the RAC seeing an average rise of £385 in 2008 to £409 in 2009. This compares to figures from Sainsbury’s which estimates the average annual cost of car insurance per motorist has risen from £488.48 in 2008 to £551.74 in 2009. The Sainsbury’s figures amount to an increase of 13% compared to 2008 and when compared to 2007, it demonstrates an increase of 23%.

Whatever the situation, the RAC cites various changes in the habits of those running cars in their day to day lives, such as the return to the one car family and downsizing the size of the vehicle (with the RAC citing more women doing this than men).

 2009 did see a decrease in fuel costs despite rises and falls all year round and the RAC cites figures that claim a fall of 10% in the last 12 months, a fall to £1,184 for the motorist per year, whilst diesel has fallen by 14%.

Sainsbury’s Finance comments on their figures, with Ben Tyte saying “While certain costs of running a car have fallen during the past year, compared to 2007, the cost of motoring has still increased fairly significantly with road taxes and insurance premiums both on the rise. The cost of driving a car can be kept better in check by shopping around, particularly for car insurance and servicing.”

The RAC, whilst clearly disagreeing over the news that the costs have risen, points to motorists still feeling financial pressure and acting accordingly, with Adrian Tink pointing out: “We’re seeing motorists really question how they use their cars. The trend towards the one car family shows how people are prepared to make fundemental lifestyle changes for the benefit of themselves, their families and their pockets.”

Sources: RAC Press Release and Sainsbury’s Finance Press Release Nov 2009

2009 Study Highlights Thieves Targeting top-end Cars

Thieves targeting motor vehicles are stepping up their efforts to steal top of the range motor vehicles, according to LV= Car Insurance.

Their study also highlights the areas of the country that are most likely to see people becoming the victims of car theft. These are, perhaps unsurprisingly, all large cities.

In the last five years, there has been a decrease in the age of the car that is most likely to be stolen, with thieves targeting eight years old cars as opposed to ten year old vehicles five years ago.

LV= sourced their data from claims made by people with motor insurance, with other figures relating to the British Crime Survey of 2007 and 2008, which showed that less cars were stolen during this period than the one before, with an 11% decrease shown.

However, in general, LV= claims that their data shows an increase in the size of the claims made between January and May 2009 in comparison to the same time span in 2008. The increase amounted to 38%, which rose to 44% when compared to 2007.

As a result, John O’Rourke, Managing Director of LV= Car Insurance issued some advice: “Our data indicates that motorists need to take extra care if they drive a car that may be particularly attractive to thieves.

“Having an immobiliser or tracker device fitted, and ensuring the car is kept in a locked garage will not only keep your insurance premium down but will help towards keeping the car safe.”

He also highlights one of the reasons why such top of the line cars are being targeted: “It would appear that the cars that are being stolen are specifically targeted by thieves who will often break into the owners property to steal the keys.  Many of these cars are then exported to be sold overseas.  Owners of top-end vehicles, like Porsches, BMWs and Jaguars need to be even more vigilant to keep their cars safe.”

Car owners are most likely to have their car stolen in cities such as London, which came out as the most likely city to experience such crime, followed by Manchester, then Cardiff, Leeds and Birmingham.

It shows that people need to take greater steps to protect their cars, or else face the consequences of an increased motor insurance premium.

Source: LV= Press Release July 2009

Motorists are Demonstrating a Lack of Knowledge in Even the Most Basic of Techniques

When someone owns a car, there are various tasks that they should be aware of; ones that could make the difference between a safe car and a potentially dangerous one.

Motorists should know how to change a tyre, charge the battery and check the oil levels (topping them up if necessary). However, a study by Britannia Rescue, highlighted by LV= Friendly Society, suggests that the majority of car owners are clueless in these areas.

From the period between July 2008 and July 2009, many of the call outs by Britannia Rescue were said to be the result of driver error, such as failing to grasp basic car maintenance and inserting the wrong type of fuel into the engine.

Obviously not all of these can lead to a claim on the driver’s motor insurance, but in some cases these problems could easily lead to an accident. Failing to check tyre pressure, for example, might have an effect on the performance of the car and if a damaged tyre causes a collision then the consequences could be severe. For example, if a car is over-inflated then this can cause problems in steering and driving the car in a safe manner, whilst under-inflated tyres can overheat.

So if the car owner is involved in a crash then as well as the major problems this could cause, it may also lead to a rise in their motor insurance premium if they are forced to make a claim.

Of those surveyed 70% of motorists were unable to perform various basic tasks, whilst 42% were clueless in changing a tyre. Some people were  unable to tell if their tyres have adequate tread and, perhaps most surprising, some motorists did not have any idea how to even open their bonnet.

Simon Stevens, the General Manager of Britannia Rescue commented on the findings: “Some tasks such as checking the tyre tread and pressure regularly, and checking the oil level, are vital for ensuring a car is safe to drive. They could also save your life in an emergency.

“These basics are now part of today’s driving test and we’d urge all drivers, however long they’ve been driving, to brush up on their car maintenance to improve reliability and also road safety for everyone.”

Source: LV= Press Release July 2009.

According to new Figures from Sainsbury’s Finance

It is one of the factors cited by modern drivers as a nuisance of the modern world – car insurance is too high, with unaffordable premiums making cars uninsurable.

However, despite the risks of even higher premiums for car insurance, two thirds of Britons are still admitting to driving in a ‘potentially dangerous’ way, according to figures released by Sainsbury’s Car Insurance.

Their figures demonstrate two thirds of drivers in the UK admit to taking part in a dangerous activity whilst driving during one month earlier in 2009. The figure of 69% of those asked demonstrates a 4% increase on the same period from 2008.

There are a range of illegal habits that drivers should avoid taking part in unless they want to face prosecution, an injury or their car becoming uninsurable in the future. Some of these are well known, such as talking on a mobile phone whilst behind the wheel and drinking and driving. However, there are certain activities that some people might not have considered.

Those who do not want to see an increase in their motor insurance premiums might wish to stop eating and drinking whilst driving, driving whilst tired, speeding excessively or wearing flip flops to operate foot pedals. Eating and drinking behind the wheel accounted to 43% of motorists during June 2009, a 2% increase from the year before, with driving whilst tired close behind at 32%, a rise of 4% from 2008.

Not all of the figures show a rise and as shocking as it might sound to hear that some Britons might feel the need drive bare-footed or with flip flops, these figures actually went down from 18% to 14% in the last year.

Worryingly though, drink driving has shown no change from the year before, remaining at 9% as it did in 2008. This is despite the warning that those who are convicted of a drink driving offence may find it hard to find an insurance provider willing to provide them with motor insurance in the future.

“Unfortunately many motorists get distracted too easily whilst driving and don’t consider the possible consequences of their actions”, said Lucy Hunter of Sainsbury’s Car Insurance, “We would urge motorists to concentrate at the wheel and not be tempted to engage in anything that could distract them.”