Will insurance fraud crackdown cause premiums to tumble?
In a new bid to crackdown on the amount of fraudulent home and traders insurance claims, Justice Secretary Chris Grayling has vowed to get tough on fraudsters and those trying to cheat the system.
Insurance fraud costs the industry billions each and every year, adding somewhere in the region of an extra £50 to the average home and car owner’s yearly bill. To help combat this rising tide of insurance fraud, the government has assembled a new task force, who they promise will take radical steps to keep the fraudsters at bay.
A team of experts will also put their heads together and come up a series of new proposals aimed at tackling dishonest claimants who see insurance fraud as a shortcut to lining their pockets.
Figures show that the most prevalent type of insurance fraud in the home insurance sector is people lying about the value of their goods, often inflating their worth, following a break-in or robbery. This may seem innocuous, but it is costing the industry millions of pounds, and, in some extreme cases, can lead to completely falsified claims.
The motor trade insurance industry is also undergoing reforms, their aim being to curb the number of false whiplash claims that cost motorists upwards of £2 billion every year, and fatten premiums by a whopping £90.
Potential whiplash cheats will have to face down a panel of experts, including accredited doctors, as part of the new system that comes into action early next year.
“We are turning the tide on the compensation culture and helping hard working people by tackling high insurance premiums and other motoring costs,” commented Grayling.
He went on to say that although the government has taken big strides towards reducing the number of bogus whiplash claims, the industry is still crying out for more far-reaching reforms, ones that extend beyond just the motor insurance sector.
The Association of British Insurers (ABI), applauded the government’s commitment to squashing what they called the “whiplash epidemic”, but claim that this is just the beginning and more needs to be done to tackle the issue of fraud.