AI Solutions: Insurance Scams

AI Solutions: Insurance Scams: Well first it was fronting, a young driver gets a parent to insure the car and they are a named driver hence lower premiums which equa...

Insurance Scams

Well first it was fronting, a young driver gets a parent to insure the car and they are a named driver hence lower premiums which equals a criminal offence, now we have older drivers flouting the law too.  A very limited survey identified that some drivers over the age of 70 are not renewing their licence, either due to lack of understanding, zero contact from the licencing agencies, just not bothering or losing their licence for health issues, yet still insuring their vehicles.

If you renew with the same insurance agent, or even when taking out a policy with a new broker they never ask to see the driving licence of the insured, the driver may or may not have a conviction, ban or valid licence.  So what happens in the event of an accident?  Well, the driver is not insured, and a named driver would still not have valid cover as the policy holder would have given false information.  Check the small print, it alleviates the insurance company of any responsibility if you fail to declare.

With over one million older drivers, there is a very real risk associated with this group.  So why don't insurance companies ask for proof of a licence when insuring your vehicle?  Firstly they ask you to confirm you have a licence and have held it for x number of years, if you have an accident that is your fault then you will lose your no claims bonus, if your insurance is invalid then you will become personally liable, hence the insurance company will have no concern about their involvement but you will of course not get a refund on the premium and run the risk of being fined for false declaration.  If it is a non fault accident, your insurance company will encourage you to pursue this direct with the other party and no need for you to show your licence.

The young driver is often targeted as likely to be uninsured and a risk taker, the older driver doesn't inspire the same investigation, yet their accident rate in terms of number equals that of the new driver age group.

Will the removal of the counterpart and introduction of a digital service which enables easier access to driver records may make it easier to spot, but only if insurance companies make this part of their regular admin checks on renewal, that will take additional time and ultimately add to the cost, meaning premiums are unlikely to fall by £15 as suggested, when just changing your address on a policy costs £30.  With the new system not likely to be up and running until well into next year, what happens if today you meet a potentially unaware, uninsured driver, who is going to cover your costs?