March 27, 2023

Motor insurer Aviva has warned customers not to misrepresent their personal details to “save a few pounds” on their policies as cost-of-living pressures deepen.

The company — one of the biggest motor underwriters in the country, covering more than 2mn private cars — said cases of fraudulent or suspect policy applications had risen by 16 per cent year-on-year between January and October, to more than 23,300.

The majority of these cases, it said, involved customers who changed details about themselves, their car or driving history to secure cheaper cover. For example, lying about their age, the amount of penalty points they hold, or saying their car is kept in a garage overnight when it is not.

“Motorists should avoid the temptation to change their details in [an] attempt to save a few pounds, as the penalties for policy fraud can be costly and add pressure to motor insurance premiums for all motorists,” said Aviva’s head of motor underwriting Iain Hamilton.

He added that the “overwhelming majority of our customers are honest, and we have a duty to make sure that we do everything we can to minimise the impact of fraud on their motor insurance premiums”.

Around 15 per cent of policy fraud detected by the company came through so-called ghost brokers, where an unauthorised person acts as an intermediary between the customer and the insurer and supplies misleading information. Using such a broker could lead to a fixed penalty or a car being seized, Aviva said.

The insurer’s research suggests one in four people have been approached online by someone offering cheap car insurance. And that one in five people would consider buying cheap insurance from an individual on social media, even if they had doubts about whether the person was a genuine broker.

“As pressure mounts on the cost of living, motor insurance customers should be wary of insurance offers from unclear, unsolicited or unusual sources — especially online messaging platforms,” it said.

Motor insurance is the most common type of fraud across the personal insurance industry. The latest data suggest that economic pressures might be leading to higher levels of customer fraud, after a predicted rise during the Covid pandemic never came to pass. Overall, cases of insurance fraud fell in 2021.

The Financial Conduct Authority has raised concerns with insurers about the impact that the cost of living crisis could have on insurance buyers in general, including that they might cut back or cancel their cover. It July it said firms should “consider what further support they can offer” to those struggling with premiums.

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