Drivers Turn To Fraud To Help Make Ends Meet
July 28th, 08The Association of British Insurers has announced recently that motor insurance fraud has taken a staggering leap this year due in large part to the credit crunch. Strapped for cash, drivers are turning to fraudulent claims as a way to get some much needed dollars. The risks associated with making a fraudulent insurance claim seems to be worth it for those drivers who report their vehicle damaged or even stolen.
The amount of these claims has jumped to 70% over the last four years which is alarming to industry experts. Largely due to a record amount of consumer debt and the lack of available credit lines this jump translates to 24,000 false claims from the 14,000 recorded four years ago.
Other numbers bring the current credit crunch into a new perspective. According to estimates fraudulent insurance claims are up to about ₤5 million a week and this number only reflects auto insurance claims and not other forms of insurance. Other fraudulent claims involving other areas beside auto is estimated at being around 90,000 claims made in 2007 alone.
Whether this trend is being seen in other countries and with other insurance companies is as of yet unknown but the instances in the U.K are surely to become more of a trend.
With the credit crunch in full gear many consumers are finding it impossible to find a reasonable line of credit or to refinance or even achieve a mortgage in general. This is leaving many without a way to meet sudden and unexpected bills. This is a primary cause of the fraudulent claims.
Many expect false claims to continue rising as the months progress and prices like food and gas increase. This can mean higher premiums for those honest drivers who may already have a hard time meeting bills on time.
Recent additions:
