Would You Like To Know Why Insurance Premiums Are On The Rise?

Consumers seeking the best deals on car, van or motorcycle insurance have had a torrid time over the last couple of years.

The rising costs of policies has led to many people complaining at the unfair costs that insurance companies are levying against the motorist, claiming that the huge increase in the cost amounts to a form of profiteering.

Indeed, the Office of Fair Trading (OFT) has announced that it is set to look into the cost of vehicle insurance premiums over the next few months to investigate the claims by many motorists and motorcyclists that they are being overcharged by insurance providers.
According to the AA, the average cost for comprehensive insurance cover rose by 40 per cent in the year to March. In particular, young drivers have been hit by these huge increases, with those aged between 17 and 22 forced to pay a typical premium of £2,431 a year; an increase of 64 per cent.

Initially, these huge increases seem to be vastly inflated and an unfair levy on the motorist. It is not difficult to see why car insurance comparison websites are doing a roaring trade when people come to renew their insurance.
On occasion, however, a story breaks that may just explain why there has been such a drastic increase in motor vehicle premiums over the last few years.

On 8th September, The Sun ran a story about how a group of people staged more than 120 fake car crashes within three years in an attempt to scam more than £1 million from car insurance companies.

The gang comprised of Rosul Yusuf, 33, Shlim Miah, 29, Halimur Rashid, 28 and Noveed Akhtar, 39, who were employed by a total of three accident management firms; Prestige Auto Group, which became Diamond Auto Group based in Walthamstow, while the third was named Motor Alliance and was based in Tottenham.

Each of the three companies was run by two brothers; one, Samsul Haque, was said to be “up to his ears in motor insurance fraud”, according to the prosecution. He has admitted to conspiracy to defraud in court.

While the two brothers oversaw the operation, it is alleged that the four men working for them arranged to handle bogus motor insurance claims on behalf of client motorists. The claims would involve old cars being involved in non-existent collisions with prestige vehicles.
The four men would then pretend to act on behalf of the prestige car driver to make spurious insurance claims, including like-for-like car hire and fictitious repairs to the expensive vehicle. They demanded that insurers sent the awarded payouts to them rather than the driver in question.

Although fraudulent claims on this scale are relatively unusual, the number of dishonest claims is on the rise. The Association of British Car Insurers found that in 2008, £260 million worth of claims were found to be fraudulent, dishonest or at the very least, a gross exaggeration of the facts.

By 2011, law firm Hill Dickinson reckoned the amount claimed fraudulently was in excess of £1 billion.