New U.K. Database Tackles Auto Insurance Fraud

Where there are cars there are accidents, and where there are accidents there are insurance claims, which unfortunately are too often phony. The U.K. has announced a new measure to try and combat this kind of fraud, which the Association of British Insurers (ABI) estimates costs the industry around £20,000 ($37,300) a day.

An ABI bulletin described the initiative as a “new national database, which is being run by vehicle information experts HPI, and will contain details of all vehicles written-off following an accident or reported stolen.” It will also keep track of over six million claims for total loss vehicles, “enabling insurers to expose scams and protect honest motorists.”

The database replaces the Motor Insurance Anti Fraud and Theft Register, and it is hoped it will help “identify fraudsters who insure their vehicle with several insurers at the same time and then try to claim from each following a genuine or staged accident, or having reported the vehicle as ‘stolen’.” The original register was set up in 1987 to keep track of all vehicles written off by insurers, allowing them to check accident histories and claims made against these vehicles.

The ABI cited two salient examples of “multiple cheats who have already been caught out.” They include:
– A policyholder who insured his old Fiat car with 11 different insurers, and then claimed for a replacement from each, following a crash, which he had caused himself. If successful he would have stood to gain £34,000 [$63,410] against the car worth £1,000 [$1,865].
– A woman reported her car stolen to the police. After her insurer had paid out, the database detected that the vehicle was no longer listed as stolen on the police national register. They confronted the policyholder who admitted that the car had not been stolen in the first place.

Justin Jacobs, Head of Motor and Risk Pricing at the ABI, commented: “Dishonest motor insurance claims are paid for by honest customers – this is why insurers are determined to stamp them out. The development of this new database shows the industry’s commitment to sharing information with the common aim of reducing insurance fraud. Not only will it help detect more motor insurance fraud, but it will act as a strong deterrent, making anyone thinking of cheating on their insurance think twice.”

Joe Doyle, Commercial Director of HPI, stated: “The new database supports insurance fraud detection by making the most of all available intelligence on total losses and thefts, including information from the Police National Computer. HPI is delighted to be running the system and at the support it has received from the whole motor insurance community.”