Why are insurance premiums so high?

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WITH cars becoming generally safer on the roads and increasingly hard to steal, why are insurance premiums still going up? Insurance companies say the answer is simple – it’s fraud.

Many Britons appear to take the view that honesty is not the best policy when it comes to taking out car insurance. In the UK, industry figures showed companies were uncovering almost 3,500 fraudulent applications each week.

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The Association of British Insurers revealed that in 2013, UK insurers detected 180,675 attempted fraudulent applications for motor insurance, equivalent to 495 a day. And as a result, fraudulent applications push up the cost of premiums for the rest of us. According to the industry, more than £2.1 billion of undetected insurance fraud is committed every year.

Spain is not much better off. With a reported fraudulent claim being made every one minute and 16 seconds, they are not far behind. However, UNESPA, the association of security businesses in Spain, is on the case.

UNESPA, which has just recently held its awards ceremony, has congratulated and rewarded the work of the insurance fraud detective agents. Companies are increasingly turning to investigators in a bid to combat fraud, and in turn saving Spain’s insurance companies around €426 million in 2014.


The report shows that the majority of insurance fraud is for less than €500, and that since 2008 growing numbers of people have tried to fool their insurers. There are even criminal gangs in operation who are prepared to fake car accidents.

The likes of scams such as the infamous ‘Crash for Cash,’ where gangs organise staged crashes, known to be rife in the UK, have not caught on in a big way in Spain as of yet. But seeing as the UNESPA detectives are now fully aware of the racket, it would appear its days are numbered.





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