Fraud makes car insurance policies more expensive

Fri, 23 Jul 2010

An increase in policy premiums is due to the level of fraud the industry is experiencing, says AA car insurance .

President of the AA, Edmund King, explained that the cost of meeting claims was 22 per cent more than the money received by insurers, which means there is a financial "chasm" that has to be filled. The firm highlighted that insurance premiums rose by 11 per cent during the quarter ending June 30th and Mr King attributes this to fraudulent activity.

He said: "Insurers are increasingly charging higher prices to these people to cover the increased fraud risk." AA car insurance reveals that the speed at which the cost of a premium is rising is currently is the fastest on record.

Last month, the firm's pet insurance division claimed that currently there is a trend for people to name their animals after famous footballers, such as David Beckham, Eric Cantona and George Best .
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