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Daily Insurance Industry News
Saturday 21st of October 2017
December 23, 2008

ABI detects rise in “front end” fraud

by Gill Montia

Story link: ABI detects rise in “front end” fraud

The Association of British Insurers (ABI) has warned that Britons are increasingly putting their insurance cover at risk by cheating, in the hope of getting a better deal.

Insurers are uncovering a growing number of cases of “front end fraud”, or incidents where the customer has lied or failed to disclose material information to get cheaper insurance.

Deceptions regularly exposed include “fronting”, for example where parents add a son or daughter to their motor policy as an occasional named driver, when in fact the son or daughter is the main driver.

Another means employed to keep premiums to a minimum is the non-disclosure of motoring convictions, which can range from a speeding conviction to drink driving.

The ABI cites the case of one policyholder whose £7,000 claim for a stolen vehicle was rejected, as it was discovered that he had failed to disclose two convictions for driving without insurance.

Consumers are also using the excuse of “forgetting” their claims histories and failing to declare motor accidents and in the case of home insurance, burglaries.

Regarding life and health cover, levels of alcohol and tobacco consumption are sometimes deliberately under-estimated when proposals are completed.

The ABI’s director of general insurance and health, Nick Starling, advises that honesty is the only policy because cheating to get cheaper insurance puts the cover in jeopardy, with potentially disastrous consequences.

Whereas a combination of being truthful and shopping around means that the insurance delivers when the policyholder needs it and can be purchased at the best possible price.

 

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