busysblog.com

There has been a lot of talk recently about the rise in car insurance premiums in the UK. Some estimates have claimed that premiums have risen by as much as 30% in the last few years.

So what’s causing these rises? Quite simply, the insurance companies are struggling to keep on top of the massive increase in insurance fraud. Fraud has been a problem for many years but a certain type of fraud is on the rise and it’s this “cash for crash” fraud that is costing the insurers most and making life difficult for honest motorists.

This type of fraud takes place when a motorist deliberately crashes his car in order to make a claim for injury compensation. Usually a low-speed accident is faked, minor damage is sustained and the fraudster makes a claim against the third party insurance company for whiplash type injuries.

It’s a common and growing problem in some parts of the UK, so beware of fraudsters and make sure that you get an independent witness if you are ever involved in a road accident.

When you buy insurance, what’s the first thing to pop into your mind? The premium, right? Well, that’s sort of right. What’s meant here is that the premium is not everything. Because believe or not, car insurance isn’t actually a product; it’s a legal arrangement; so it’s kind of a cross between a product (in the sense that it can be packaged up) and a service (in the sense that it isn’t going to collect dust on a shelf somewhere, and so these things can’t really go “on sale” per se). So that all said, what does that mean? What’s the bottom line? The bottom line is that it’s a complete zero sum situation; it’s a complete give and take. You put in what you get out, and it’s all mathematically set up this way; and it’s all lent itself really well to software and the advancements in computer technology over the past few years.