New measures to curb motoring insurance fraud

The Daily Mail reports that according to the data released by the Driver and Vehicle Licensing Agency (DVLA), about 16 per cent of the total 35 million motorists in the UK do not disclose their driving record accurately. The fear of refusal of the insurance policy or the policy being made too expensive pushes motorists into lying about the disqualifications and serial speeding convictions.

Figures from the Association of British Insurers (ABI) reveal that about 180,675 attempts were made to get the insurance cover at a cheaper rate which amounts to almost 3,500 every week. Such applications amount to fraud. Other fraudulent actions which figure increasingly are drivers who alter their driving license to remove driving convictions.

Through the partnership between the Motor Insurers’ Bureau (MIB) and the Driver and Vehicle Licensing Agency (DVLA), a new licence checking system has been established known as ‘My Licence’. They will provide a data sharing service to the motor insurance companies to ensure accurate data is present with the insurance company through a secure MIB hub and the use of a driving licence number according to a spokesman for ABI. This crackdown has led to the insurers raising money which could be utilised in reducing the cost of premiums of the honest motorists by £50. However insurers do not feel this system is full proof. It will not help in identifying those million more drivers do not regard the ‘little white lies’ for reducing the cost of their premium a motoring offence.

According to ABI policy director and Deputy Director General Huw Evans, this system is one of the most recent attempts in a series of legal reforms aimed to curb the fraudulent insurance claims and practices.

Transport minister Claire Perry, feels that ‘My Licence’ is both a good initiative for the motorists and the motor insurance industry. This service would allow insurers to value the premium rates more accurately and also would help in reducing the premiums for honest motorists. According to Janet Connor managing director of AA Insurance, though insurers are now better at detecting fraud still the number of attempts to carry out deceitful claims and applications shows no sign of reducing. Julie Daniels, head of motor Insurance at asserts that with accurate information about the motorists being provided it will benefit the consumers at large by reducing the premium rates. However the change can be materialised only if the ‘My licence’ initiative is adopted throughout the industry.


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