The UK Insurance Blog

Watched a fascinating fly on the wall documentary on Channel 4 last night. Scams Fiddles and Honest Claims was filmed in the Norwich Union insurance investigation department. Their “front man” told us that 1 in 10 claims is fraudulent or inflated and that last year they dealt with 20,000 fraudulent claims and they were expecting that figure to rise to 30,000 this year. The TV program had some huge holes in it but I’ll tell you about them as we go through the list.

First claimant was a lady who had submitted a claim for a £2,500 engagement ring left in a hotel safe in Egypt. The investigator went to see her ex-fiancee before meeting her and he handed over said ring (he’d taken it with him when they had split up). Once confronted with the ring, she had no option but to confess. She said that she needed the money and she’d been paying insurance for years so thought that they owed her something. It seemed that she worked in a pub and she said that she’d spoken to loads of people that were getting away with insurance fraud. The N.U. man told us that once insurance fraud was detected the company would do its best to get back any money already paid out, they would then cancel any other insurance that the client held and by doing this it would make it difficult or impossible for the villain to be able to get insurance from any other company.

The next case was an immigrant (he didn’t speak English and had an interpreter present) who claimed for £13,000 worth of electrical equipment such as flat screen tv, expensive camera etc. The investigator was very dubious about the claim because of the area of Manchester that the guy lived in. He didn’t believe that anybody in that area would own £13,000 worth of high quality electrical equipment. The suspect proceeded to produce the empty boxes for all of the stuff, plus receipts. The program said that 10 months later the claimant still hadn’t been paid out but it left you up in the air wondering if he was guilty or not.

In a short piece filmed in the N.U. office they showed a sophisticated machine that could show if a receipt had been tampered with, a bill for £3,000 had been altered to £8,000.

Another film clip showed a couple whose house had been flooded in Hull earlier this summer. Their total claim of £40,000 (with a different insurer) had been disallowed because a neighbour had phoned the insurance company to say that they saw the claimant taking a fridge and freezer out of a skip and putting them in his shed before claiming on them. The N.U. man was quick to point out that one single discrepancy in a claim could invalidate the entire claim and it seems that’s what had happened on this occasion. He also told of an instance where a lady phoned to arrange house and contents insurance…2 hours after her house had been flooded!.

They were also investigating another claim where a builder was claiming for a stolen van where an anonymous tip-off had told them that it had been driven away by his mate. They were having trouble making this one stick because of lack of evidence, but it was very clear from the program that the insurance companies put a great deal of weight behind tip-offs and that you could be in serious trouble if you find yourself in this position. The moral seems to be not to fall out with friends or neighbours.

The final two clips involved organised gangs defrauding the insurance companies. In the first one the investigators had uncovered a huge ring of people that were having “accidents” amongst themselves. In every case it was reported that a car had rear-ended theirs and pushed it into a tree or a lamp post. When they visited one of the claimants (Mr Bafanya) he was asked to explain what had happened. He recounted how a car had hit him and pushed his car into a lamp post. Unfortunately, on the claim form he had said that his car had been pushed into a tree. The claim was dismissed. The other scam involved a gang of people who were slamming on their brakes when approaching the entrance to an empty roundabout. The innocent (but careless) motorists behind them were shunting them up the rear and when you hit another car up the arse it’s ALWAYS your fault, so they were able to claim against the other drivers insurance and presumably pocket the proceeds.

A really interesting program, there’s a number of video clips from the program on the web page, well worth a watch.

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A piece in the business section of The Scotsman is taking a pop at the comparison sites such as moneysupermarket.com and confused.com. The article is saying that the comparison sites are not comparing like with like (that’s possible), and that customers are being tricked into buying the cheapest product without checking if it meets their needs. I can’t see that you can accuse the price comparison sites of mis-selling because their customers don’t read the policy document before buying. Surely that’s possible with any online site, no matter what it’s selling. If the client buys a product without checking to make sure that it does what he wants, it’s hardly the web site’s fault.

The article goes on to recommend that you buy all insurance through a broker. That’s fine if you want to spend over the odds  on your insurance but many of us have got used to the cheaper insurance premiums which are only available online. I’d be the first to agree that if you have a situation that doesn’t seem to fit any of the online products then you should use a broker so that you can explain your needs and he’ll find something that is right for you. It’s a completely different situation when you are middle aged, with a clean driving license and want to insure your standard production car. In that situation you’re never going to find a broker who can offer the same prices as a direct online insurer such as Tesco or Direct Line.

The whole situation reminds me of the story of the tech support guy on the phone to somebody whose computer was completely dead. He’d been on the phone for around 20 minutes getting the customer to check this and that and then asked the client to check that the monitor was firmly plugged into the back of the PC. The client replied that he’d have to get a torch to see..because they had a power cut. The support guy calmly instructed the client to box up the computer and return it to the store, to which the client replied “ah, so you know what’s wrong then”. “Yes sir you’re too F£$%ing stupid to be allowed to use a computer !”. Sadly, the tech support guy was fired, but I’m sure that he found a more satisfying job as a result, he certainly earned notoriety in the computer industry.

My reason for recounting the above tale is that maybe all people wanting to buy online should be given a simple test to ensure that they are fully capable of understanding exactly what they’re buying. Why does everything have to be “dumbed down” until it’s understandable by my pet goldfish?.

We’ve finally got round to setting up the blog that will let us keep you informed of what’s happening in the UK insurance market. It’s a huge area that affects us all, since car insurance is mandatory for all vehicles and you’d be a brave man in this day and age to fail to insure your house and its contents.

We’ll bring you details of any special offers that might save you some money but we also intend to offer you a better insight into the UK insurance market with some detailed articles on various aspects of the subject that you might find of interest. The first of these articles looks at how your location affects the car insurance premiums of different insurers. It’s an interesting read that emphasises our message that you should shop around for the best deals and never accept an insurance renewal without checking the market.