Staged car accidents 'on increase'
Published 11/03/2011 | 07:42
Fraud, including "staged accidents", is driving up the cost of motor insurance, a report by MPs has said.
The insurance industry should fund a dedicated police unit to stamp out false car insurance claims, recommended the report by the House of Commons Transport Committee.
The committee also urged the Government to make the driving test more rigorous to help bring down the "appalling" casualty rate among young drivers.
And the MPs also said that the insurance industry should take steps to make more transparent the habit of insurance claim "referral" payments involving such organisations as rescue truck drivers, vehicle repairers, credit hire firms and medical experts.
In evidence to the committee, the AA reported that average premiums quoted to motorists for comprehensive cover increased by 29.9% in the year to October 2010.
Launching the report, the committee's chairman Louise Ellman said: "Wider access to justice is to be welcomed, but it has come at a significant cost, with far more personal injury claims being made than in the past.
"The police made plain to the committee that 'staged accidents' are on the increase and that, so far, we have been lucky there have been no fatalities resulting from such incidents. That luck may run out unless the insurance industry acts rapidly to help the police target this kind of insurance fraud."
The Labour MP for Liverpool Riverside went on: "Consumers are largely unaware of how much money moves around the insurance industry in this way when they make a claim. They deserve to see where their money is going.
"If insurance companies cannot agree a method by which to improve transparency around referral fees, then the Government should step in, with legislation if necessary."
Mrs Ellman said she welcomes the Government's commitment to making the driving test more rigorous but added: "Proposals for change have been around for years. What matters now is that the Government publishes for consultation the changes it wants to make, with a timetable for implementing them before the next election."