Approximately 35 percent of UK motorists who carry insurance believe that application adjustment to get cheaper quotes is acceptable practice, new research from information solutions giant LexisNexis Risk Solutions revealed.
The fraction represents around 8.4 million auto insurance policies at risk, out of the over 24 million policies currently active in the UK. This is a far higher number than the 212,000 application fraud cases caught annually.
Furthermore, 13 percent believe that any alteration or omission of information is acceptable during coverage application, a figure which translates more than 3 million policy holders. The most acceptable types of fraud among UK drivers are adjusting No Claims Discount information to get a better rate (16 percent of drivers) and using a false address, occupation, or age to get a lower quote (12 percent).
Conversely, the study uncovered that around 55 percent of UK drivers believe insurers should continue to pay out a claim even if the applicant was proven to have provided inaccurate or false information.
As for claims, 14 percent believe it’s acceptable to declare self-inflicted damage as a fake hit-and-run. 9 percent said that it’s acceptable to exaggerate the effects and severity of injuries, and 8 percent to change places with the driver at an accident scene and even claim total loss by intentionally damaging or abandoning a vehicle.
“Many consumers may not even recognize that adjusting or omitting information can constitute a type of fraud. It illustrates a potential disconnect between consumers and the business of insurance. This is in itself a major challenge, but also shapes how insurers should respond to the risk of consumers providing incorrect information,” said Bill McCarthy, managing director of UK and Ireland operations at LexisNexis.
“It also demonstrates the increasing importance of verified data, which can help manage risk effectively not only at underwriting, but also reduce the burden for claims teams. By using some of the capabilities available today such as pre-filling verified data into the application process, insurers can simultaneously improve the quotation experience for their customers, whilst subtly discouraging falsification or omission,” McCarthy told Business Wire.
