Thursday 19 October 2017

We talk out of both sides of our mouth when it comes to what constitutes insurance fraud

'The research shows drivers between the ages of 17 and 29 have a more liberal interpretation of insurance fraud than their insurers' (stock photo)
'The research shows drivers between the ages of 17 and 29 have a more liberal interpretation of insurance fraud than their insurers' (stock photo)
Charlie Weston

Charlie Weston

When is a fraud not a fraud? The answer seems to be that it is fraud when someone else gives false information, but not when I do it. That conclusion is hard to escape from when considering a survey commissioned by Liberty Insurance.

The survey shows young drivers do not have a problem with being untruthful to their insurer. They are not being open about who is the primary driver of the car or about their profession. Of course young drivers face particular challenges getting insurance, but is it acceptable to lie?

Liberty said that being untruthful about the primary driver, your profession, annual mileage or penalty points when applying for insurance constitutes fraud.

If detected, it may prevent an individual from securing insurance cover in the future or invalidate a claim, the insurance company said.

The research shows drivers between the ages of 17 and 29 have a more liberal interpretation of insurance fraud than their insurers.

The survey, conducted by Red C Research, found 56pc of young drivers agreed that being untruthful about their job description was a "mild" fraud, with many not considering it to be fraud at all.

Almost a third of young drivers also regard being dishonest about who is the primary driver of the car to be a minor issue.

Insurers have highlighted in the past that young drivers are leaving themselves open to invalidating their cover by claiming they are not the main driver of a car, when in fact it may be insured in their mother's name.

A majority of young drivers also see it as a minor matter to provide a false estimate to their insurer of the number of kilometres driven per year.

However, when it comes to penalty points, almost half feel it would be "extreme fraud" not to be upfront about this. A huge majority of all drivers also feel a claims culture is more prevalent now than a decade ago.

What all of this shows is that we feel it is OK to lie when applying for insurance, but not when claiming.

Yes, insurers find it easy to bleat on about insurance fraud as a convenient way to cover the fact that they have made horrendous mistakes lately.

But we as a nation do seem to be talking out of both sides of our mouth when it comes to fraud.

This could be described as cognitive dissonance, holding two or more contradictory beliefs or values.

No wonder we have a problem with insurance premium pricing.

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