Car Insurance Costs Rise Due to New Scams

News entry dated 01st Nov 2016

A perfect storm of tax increases, higher vehicle repair costs and a proliferation of scams has significantly pushed up the average cost of car insurance in the UK.

According to several reports and studies in recent weeks, car insurance costs are universally rising. Sky News reported last month that average premiums now come in at £697 per year, with that figure set to rise comfortably over £700 by the end of the year. A separate report on This is Money, based on figures from Confused.com, already arrives at an average premium of £737.  Older drivers are said to be experiencing the steepest increases, and at the other end of the scale, young 18-year old drivers are typically paying over £2000 for their insurance – a figure likely to exceed the value of their cars in some cases.

So what’s behind these stratospheric rises? First off, insurance premium taxes have increased. Meanwhile “higher repair bills” are also cited as a factor. But a significant rise in car insurance related scams is also very much to blame.

Car Insurance Scams

Car Insurance Scams

Car insurance scams are becoming increasingly sophisticated and go far beyond the spate of false whiplash claims that plagued the industry some years ago.

report in The Telegraph discusses all kinds of scams affecting the motor insurance industry, both in terms of false claims and in the rise of new scams involving criminals selling fake or invalid policies.

The scams listed include:

  • Staged accidents.
  • “Crash for cash” scams, sometimes involving criminals encouraging drivers to pull out and drive into other vehicles by flashing lights to indicate the victim is being given “right of way.”
  • “Swoop and squat” maneuvers involving two cars working together to force a driver to “rear end” another car to force a claim.
  • Rogue insurance brokers arranging cheaper insurance policies for drivers by falsifying address details in order to register insurance policies in “safer” areas.
  • Completely fake insurance policies being sold to unsuspecting drivers by people posing as brokers.

The last two scams listed above are fairly new, but with prices rising, “ghost brokers” are moving in to capitalise on those keen to minimise an essential regular expense.

Undoubtedly, cynics will presume that insurance companies are making the most of all of this and boosting profits against a backdrop of several reasons to increase premiums. It would be naive to dismiss this as a possibility. Either way, however, there are some clear reasons why premiums are on the up – and there’s no reason to expect the trend to reverse any time soon.

Have you seen your premiums increasing, or been the victim of any of the scams described above? Share your experiences in our comments section.

IMAGE CREDIT: Geograph

Comments

96 Comments On "Car Insurance Costs Rise Due to New Scams"

avatar
R F
R F
hi people well ive read all the moans & groans over accident & insurance hikes and you know what i fully aree with every one here ITS A JOKE i started to drive at 17 this was 39 years ago and i was always lead to belive as you get older your insurance gets cheaper well guess what im still waiting ?? ok ive had reductions but ive had to fight tooth and nail for it as if you dont ask you dont get try to remember that with out you they have no business ?? so you are a… Read more »
jim ward
jim ward
i renewed my car insurance with ford insure it had doubled in price i asked why the reply i got is so incredible i had a very small shunt the driver was a male the insured was a female ,riding in passenger seat the damage to my car was under £100 i reported the accident to insurance co. this was in december renewal was in july iwas told THE COST OF CAR HIRE FROM OTHER DRIVER WAS £3500 AND UP TO THAT TIME (july) THEY HAD NOT RECEIVED THE REPAIR BILL ,the other drivers car was a citroen c1 worth… Read more »
Francis
Francis
I am insured with AXA direct, as are both my parent’s car’s, I find them very good, there premiums although not always the cheapest around are often very competitive given the benefits you get from them. This year when my insurance came up for renewal I was surprised that the auto renew offer was £80 cheaper than last year and that included the Insurance Premium Tax increase. I called them to discuss to ensure that it was correct and still had everything I wanted, they offered to reduce it again without me even asking, and when I told them I… Read more »
Mike Oxlong
Mike Oxlong

It’s not the scams, it’s the greed of the insurance companies. We are always hearing of how car crime and everything else that effects insurance (indeed, ALL insurance) is coming down, but the premiums continually go up!

Brian
Brian

We always use comparison sites for anything , it PAYS to shop around after all it’s your money.

June
June
I had a no-fault accident, the garage estimate was £3900 – new rear door needed and cill and rear wing pushed in, no other damage. Insurers offered me £3600 for Cat C write off – £3195 if I buy the car back. My car 6yrs old but they said they may find more damage when they start repairs so wouldn’t repair, even though not much over ‘their’ valuation of my car. Their garage was a ‘preferred repairer’ – so it seems was allowed to charge what he wanted. When I initially hinted to their repairer that I may buy back… Read more »
Richard
Richard
About 7 years ago when my insurance was up for renewal, and started searching, I forgot date of accident ( not my fault). Got a quote with maximum no-claims protected as usual. Then discovered accident still in by a few weeks (within 3 years), so duly informed Insurance company who provided new quote of my over-sight and was informed quote would be increased by £100.00, despite protected no-claims and not my fault. Was also informed that if I did not have no-claims protection cost would have been more and that increase was due to having been involved in accident not… Read more »
Paul Gibson
Paul Gibson

I recently got my renewal notice from my broker. Increase £75. Went online to price comparison site and found I could get insurance cheaper. It was a different broker but when I looked at the insurer it was the SAME company! There is no reason to stay loyal to any company these days.

Chris Gregory
Chris Gregory

I assume Tim Lloyd that you don’t drive an expensive car

Anne
Anne
My son just received a cheque for £475 after his old car was hit whilst parked. The other driver’s insurance company does not send out assessors and decided on ‘category C’ write off, meaning they were happy for him to get the car repaired and back on the road. The only damage was that the front bumper had been knocked off, the clips broken and the paintwork scraped. It cost £160 to repair and have a new MOT to prove it is still roadworthy. Nice profit for my son, but we’ll all pay for it via our next premiums. Bizarre!!
Kyle Lenovo
Kyle Lenovo

Worth remembering that Insurance Premium Tax jumped this year, affecting all renewals of all types of insurance.
Apparently, it’s envisaged that IPT will rise to the VAT rate of 20% over the coming [few] years.

Colin Sellick
Colin Sellick

Casimir Ehlas makes a very good point. Everyone has 3rd party insurance protecting the innocent parties and private business (insurance companies) will be forced to become competitive. At the moment they have no incentive because drivers are forced by law to use a private enterprise.

Woolert
Woolert

13 year old Focus insured with M & S premium was £159 increased to £302 this year despite no claims.

Anne Fifield
Anne Fifield

@ Paul: I totally agree. It’s no good blaming only insurance companies for hiking up prices. In the end, they face extra costs due to these scams, which we all pay for eventually.
The only snag with this is that older cars will not gave these driving recorders as proof of misbehaviour, and the older a car becomes, the less vulnerable it probably is to scammers… If everyone had a recent car fitted with such a device, it might stop scammers from abusing the system.

Norm
Norm
I don’t see if you have full no claims discount why this isn’t accepted as your history of good driving in the covered historical period, ie this is the purpose of this discount after all to reward lack of claims, also if you are unfortunate enough to be scammed in a no fault road traffic collision your no claims should count as evidence of your previous good driving behaviour.I think we like America should have a third party only option(maybe we still do)that would make it cheaper as the insurer to quoteas they are only covering the third parties. In… Read more »
Nanak
Nanak

You may fond that thhe majority of manufacturers have a ‘black box’ of sorts fitted. It records what the car was doing, as in was the traction control on or off, which direction the driver was steering, how much throttle was applied and how much the brakes were being pressed.

Although it do find it a joke that the insurance for a 12 tear old smart forfour can work out at over £1000 on my comparison quote, iv paid roughly £600 for my forfour this year

Adrian Thompson
Adrian Thompson

And if you have your vehicle stolen despite insurance recommended security – it’s down as “at fault”
– Even if thief is caught and prosecuted and convicted. The insurance still put “at fault”. Bang goes no claims etc
Utter con.

J Parmar
J Parmar

My sentiment exactly!

I used to have a shoe factory, many years ago, and the premiums kept on escalating. After detailed investigation, I discovered that it was easier and more cost effective to keep on apeasing the claimants and funding it by escalating premiums.

Challenging claims is an expensive business. Whereas escalating premium is easy, especially if all insurance companies follow suit.

John
John

In reply to Dan. You can check anyone’s insurance by going to= askmid.com

MrYoung
MrYoung

I don’t go back to the original insurer if they can’t offer a reasonable renewal price but then it becomes cheaper when you challenge… Sorry, you should’ve offered your best rate to retain my business and not tried to profit from auto renewal.
Irritates me further when they come up cheaper on comparison sites too.

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