Car Insurance Fraud

Curbs to stop insurance crime welcomed

Mike Penning MP, Parliamentary Under-Secretary of State for Transport, announced two new measures to the House of Commons Transport Select Committee in January. The measures are Continuous Insurance Enforcement and a provision that will allow insurers to check information against DVLA records.

These changes could help to cut the number of uninsured drivers and reduce the amount of car insurance fraud – together they are estimated to cost honest drivers at least £69 for every car insurance policy bought.

Continuous Insurance Enforcement

The first, Continuous Insurance Enforcement, comes into effect on 1 April 2011. Essentially, it will become an offence to keep any car, even on private land, without either valid insurance or a Statutory Off Road Notification (SORN) issued by the DVLA.

The DVLA database and Motor Insurance Database will be cross-checked to identify registered vehicles that have neither insurance nor a SORN. The owners of such cars will get a letter pointing out that the vehicle must be insured or a SORN submitted. If this isn't forthcoming, the car will be confiscated and prosecution can follow, with a fixed penalty notice issued.

Simon Douglas, director of AA Insurance, has welcomed the change. "This is something that has been on the cards for a while and it will, I believe, have a significant impact on the number of uninsured drivers on Britain's roads.

"It is thought that there are at least 1.6 million cars, the equivalent of 1 out of every 20 on Britain's roads, being driven without insurance. The drivers of them cost honest motorists around £30 per year through levies insurers have to pay to the Motor Insurance Bureau to compensate the victims of collisions with uninsured drivers.

"The new legislation will help take them off the road altogether, as the police will have powers to confiscate such cars, even if they are on private land, and crush them."

Insurance and DVLA records

Later this year (date to be confirmed), the second change will enable insurers to cross-check data provided by customers against the DVLA database.

"I welcome this move, too," says Simon.

"Insurers – including the AA – do have real problems with non-disclosure of information on insurance submissions. For instance, past motoring convictions being withheld, driving experience being exaggerated, and even age or address being falsified in order to obtain a cheaper premium.

"It will also be a useful tool to help ensure that mistakes aren't made by either DVLA or insurers."

He points out that cross-checking the details will be optional, with potential customers being asked if their data can be cross-checked against the DVLA's records.

"It is unfair that honest motorists should have to bear the brunt of the cost of those who try to defraud insurers, and we have been calling on the government to put these measures in place for some time.

"I'm sure that AA Members and customers will also welcome these important steps in helping to tackle insurance crime."

3 February 2011