Wednesday 23 August 2017

Insurance fraudsters cash in with law keeping them safe

The cost of the average premium has fallen in the past two months, but this comes after average rises of close to 60pc in the last three years, prompting fierce criticism of insurers for mismanaging their businesses. Stock picture
The cost of the average premium has fallen in the past two months, but this comes after average rises of close to 60pc in the last three years, prompting fierce criticism of insurers for mismanaging their businesses. Stock picture
Charlie Weston

Charlie Weston

Professional claimants are making a living from falsifying multiple claims in a bid to get insurance payouts.

The law stops insurers sharing information on serial claimants, many of whom are criminals.

Changes in the law that would allow insurers to share information on serial claimants have yet to be delivered.

The setting up the new database of fraudulent personal injury claims is a key recommendation of a Government working group on insurance reform.

The database would record all those who have made claims which have raised suspicions.

It would be shared between the insurance industry and gardaí, while solicitors representing clients would have access to it.

Professional claimants are making a living from falsifying multiple claims in a bid to get insurance payouts, according to leading broker Jonathan Hehir of the CFM group, which includes CoverInAClick.ie.

He said what he called trip-and-trick claimants were a minority but were proving hugely costly for insurers, and their activities were pushing up the cost of cover for all drivers.

"There is a relatively small, but very active and dangerous, cohort of people out there who engage in the practice of falsifying insurance claims.

"This has the knock-on effect of putting upward pressure on insurance premiums - be they motor or commercial - as insurers endeavour to recoup the losses made on the back of these claims payouts."

The call for a speedier setting up of a fraud database comes as motorists continue to be hit with massive premium hikes.

The cost of the average premium has fallen in the past two months, but this comes after average rises of close to 60pc in the last three years, prompting fierce criticism of insurers for mismanaging their businesses.

Fianna Fáil finance spokesman Michael McGrath said fraudulent and exaggerated claims were a major problem.

He told the Oireachtas Finance Committee this month that people were flying in here to stage accidents because pay-outs were generous; so-called claims tourists.

The creation of a fraud database is one of the key recommendations of a Government working group, chaired by Financial Services Minister Eoghan Murphy, which was set up to tackle the spiralling cost of motor insurance.

Names on the database would be a red-flag signal that someone was making a false or exaggerated claim.

It would become immediately obvious from consulting this resource which drivers were making repeat claims, making it easier to tackle fraud rings.

Mr Hehir said a number of small businesses can no longer afford their commercial insurance and public liability premiums because previous claims against them have pushed up the cost of their premiums.

"So too is the financial burden borne by Irish motorists, who have seen their premiums soar massively in the last 18 to 24 months," he said.

He said Mr Murphy should speed up the establishment of a confidential register.

Through this register, insurance claims managers could cross-reference the names of any individual they suspect may be a serial offender when it comes to claims.

Irish Independent

Also in Business