Kahn news.com uncovered: Why are insurance premiums rising?
25th Aug 2011
You\'re not the only one. The cost of insuring a car is absolutely ridiculous, and is a large and growing headache.
And although angry motorists vent their anger solely on the doorsteps of car insurance companies, unsurprisingly, car insurance companies mount a hearty defence.
They point the finger of blame solely at a few unscrupulous individuals who operate outside the law, driving without insurance and making fraudulent insurance claims. It is just the type of illegal activity that costs insurance companies money and surprise, surprise, guess who they will look to recoup their losses from?
With the insurance Fraud Bureau claiming that around £44 is added to every UK motor insurance premium as a result of fraudulent claims.
In some instances, individuals or organised gangs have been caught making dubious insurance claims worth tens or even hundreds of thousands of pounds. Its major car insurance scams like this we\'re looking at in this feature.
However, what do you make of the situation. Are insurance companies in the \'right\' or are they simply finding an excuse to push prices up?
Old Trafford fraud ring:
A fraud ring consisting of 57 people, including a nurse and a bank manager, was broken up by police in 2010. The fraudsters were ordered to pay their victims almost £400,000 in damages after it was revealed that they\'d staged over 30 accidents.
The fraudsters were ordered to pay their victims almost £400,000 in damages after it was revealed that they\'d staged more than 30 accidents. Members of the ring would approach the owners of old, low value cars and ask to use the vehicle in an accident in return for cash.
Rather oddly though, all the accidents were staged in the Trafford area of Greater Manchester area at separate locations. Insurers clicked onto the scam after they received multiple claims for similar accidents in similar locations, including one roundabout near Old Trafford, the home of current Premier League champions Manchester United.
On closer inspection it emerged that in 19 of the 30 cases, the insurance claim form was completed in the same handwriting. All claims were made in 2005 and 2006.
Crashes for cash:
An elderly Manchester couple helped bring down a car insurance crime ring in 2010. Mr and Mrs Gallanders were on a roundabout in their Nissan Micra when a Lexus ploughed into the back of their car. The driver not only blamed them for the collision but called the police, accusing them of racial abuse. The accident took place in 2007 and it took three years pursuing the case through the courts before justice was done.
Two brothers from Burnley, in Lancashire, were convicted of conspiracy to defraud in 2010. It emerged that they had staged over 700 crashes to make fraudulent insurance claims worth an average of £17,000 each.
The man given a stately title to go with his surname: Brocket may well be the most famous car insurance fraudster of all time. In 1991, he broke up five classic cars from his personal collection and buried them in the grounds of Brocket Hall, his family manor house. He then made a £4.5 million insurance claim, claiming that his array of exotic cars, including a Ferrari 250 Europa and a Maserati Birdcage, had been stolen.
However, Brocket was found out after his wife Lady Brocket was caught forging a prescription to feed her drug addiction. She discovered her husband had been unfaithful and cooperated with the police in their investigation against him. He was eventually jailed for fraud in 1996.
Yet another insurance scam:
In April 2010, the Merseyside Police successfully prosecuted the largest \'crash for cash\' insurance fraud case brought by a single insurance company. A total of 25 defendants were convicted and received sentences ranging from imprisonment to community orders.
The defendants had been charged with conspiracy to defraud Allianz Insurance of £1.5m. The ringleader, Darren Duvall, received a three-year prison sentence for staging fake traffic accidents during 2005.
Duvall and accomplice Alan Bradley recruited friends, family and workers from cable TV company NTL (now Virgin media). The cable firm workers pretended they had crashed into other vehicles in their vans, admitting responsibility for the accidents, while others claimed to be injured victims.
The damage to the vehicles was faked and the victims were coached in giving convincing testimonies. To top things off, Duvall made more money on top of the insurance pay outs by referring the victims to no-win, no-fee compensation companies.
What\'s your view on this?
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