Cutting corners to get cheaper motor insurance backfiring on thousands of motorists

Thousands of motorists are paying a high price, in some cases driving illegally, by cutting corners when buying motor insurance according to the ABI (Association of British Insurers).

Insurers uncovered 212,000 attempted dishonest applications for motor insurance across 2014, up 18% on 2013 and equivalent to just over 4,000 every week according to ABI's research.

Last year saw over 1,500 reports relating to motor insurance application fraud to the Insurance Fraud Bureau's 'Cheatline', making up for nearly a quarter of the total calls received.

Motorists have been found to be lying about 'forgetting' to disclose previous claims or unspent convictions when asked, giving a false address or post code for a lower risk area, and parents insuring in their name a vehicle being mainly driven by their son or daughter, or 'fronting' as this is also known.

The ABI's research also reveals that illegal insurance advisers selling bogus motor insurance policies are on the rise, as 'ghost broking' scams result in the innocent motorist driving illegally without valid motor insurance, facing prosecution and having their vehicle seized and crushed. ABI warn that although a website may look professional, ghost brokers often operate through them, as well as in pubs, clubs, car parks and university campuses.

Mark Allen, the ABI's Fraud and Financial Crime Manager, said: "Insurers recognise that innocent mistakes and oversights happen, but anyone lying to get cheaper motor insurance, or tempted by cheap insurance offers without first checking that they are genuine, risks driving illegally."

"The consequences include getting a criminal record and a massive financial headache if found to be at fault for a crash."

"The risks are just not worth it - especially when you can shop around for the right policy at the lowest price."

The Insurance Fraud Bureau (IFB) are currently dealing with 26 cases of ghost broking fraud, and a number of convictions have already been made.

An illegal insurance adviser who made £65,000 selling fake car insurance was jailed for two years, and another con man, who illegally sold worthless car insurance to Manchester students, was jailed for three years.

An illegal adviser managed to sell fake motor insurance to over 100 drivers in West Yorkshire before being arrested and jailed for a year, and another illegal adviser who was already serving a jail sentence was recently ordered by the Central Criminal Court to repay over £600,000 to the 600 drivers he sold fake cover to, failure to do so would mean further jail time.

To avoid being a victim of ghost brokers:

- Always check your insurance adviser or seller is on the Financial Services Register

- Be wary of any insurance policies being sold via unusual methods such as: social networking sites, in pubs or clubs, in motor repair shops or newsagents.