car insurance fraud issue

[Jon1967x]

TwigtheWonderkid said:

It is taking advantage and playing the system, but it isn't dishonest and it isn't fraud.

My sis in law is is a researcher for a the BBC. On an online quote, she put her occupation as a researcher, and her employer's business as broadcasting, and got quotes of around £600. She changed employers business to media and the price was around half that.

That isn't dishonest, as her employers business is indeed media. If the insurers want to charge extra for broadcasting over general media, they should change "media" to read "media, excluding broadcasting".

Taking advantage of their quotation system's weaknesses is not fraud, it's financial astuteness.

Agreed - My job could be senior mgmt (based on number of people I am responsible for), middle management (based on relative position in company), business consultant (based on the type of advice I give), IT consultant (based on the way we deliver it) etc etc. I pick the one that gives the lowest premium. I don't say I'm a vicar (although like many on here, I could be classed as a lay preacher

[TheBear]

Ok, I'll concede the points.

It doesn't seem honest to me but if it is viewed as simply being astute and Insurance companies are aware and have no issue then that's the way it is and I guess it falls short of criminal conduct.

Edited by TheBear on Friday 18th July 11:08

[Jon1967x]

TheBear said:

Ok, I'll concede the points.

It doesn't seem honest to me but if it is viewed as simply being astute and Insurance companies are aware and have no issue then that's the way it is.

Best post I've seen for ages. Not because you agree with the view of myself and others, but because you're prepared to accept there is another point of view. If only others on PH (myself included at times) were prepared to do the same it might be a nicer place.

And in fairness to you, I understand your point of view, like many debates the apposing sides aren't arguing the exact same point - whats "technically legal" and what's "morally honest" are different things.

[TwigtheWonderkid]

TheBear said:

Ok, I'll concede the points.

It doesn't seem honest to me but if it is viewed as simply being astute and Insurance companies are aware and have no issue then that's the way it is and I guess it falls short of criminal conduct.

Edited by TheBear on Friday 18th July 11:08

I wouldn't mind betting most insurers would be pleased to attract customers who are financially astute enough to play the system. Many insurers do credit checks now and want to avoid people with poor credit history, bankrupts, etc. If they can pick up customers who know how many beans make five, I bet they'll have less fraud claims. And more opportunity to cross sell other products.

I find that most people I know who look to save money have got a few bob. Those who don't haven't.

[CYMR0]

TheBear said:

Jon1967x said:

I would consider it dishonest to give the name of someone you'd like to insure on your car if you have no intention of telling them or letting them drive purely to make a financial gain for yourself.

Imagine you are at the newsagent and a bottle of water that you would like to buy is £1.50.

You can get a special deal whereby you can get a free bottle of water if you buy a newspaper, even one you actively dislike, for a pound.

If you buy the newspaper in order to get the free water, you didn't steal the water.

This is essentially what has happened here, assuming that the insured has told the truth in all other ways.

[barker22]

So I am assuming I could add a long list of named drivers on my policy? doreen and mable down the road who have 60 years no claims from their 250 miles a year they do and no accidents etc. How about anyone else random that just happens to lower the premium, after all I don't have to tell them they are on the policy and there is a chance they might need to drive it...... a 0.000000001% chance but it is still there. This cant be legal surely?

[CYMR0]

barker22 said:

So I am assuming I could add a long list of named drivers on my policy? doreen and mable down the road who have 60 years no claims from their 250 miles a year they do and no accidents etc. How about anyone else random that just happens to lower the premium, after all I don't have to tell them they are on the policy and there is a chance they might need to drive it...... a 0.000000001% chance but it is still there. This cant be legal surely?

Entirely legal as long as you give correct details. Beyond one or two actual drivers you'll find that the premium tends to rise irrespective of the actual risk of the additional drivers.

[TwigtheWonderkid]

barker22 said:

So I am assuming I could add a long list of named drivers on my policy? doreen and mable down the road who have 60 years no claims from their 250 miles a year they do and no accidents etc. How about anyone else random that just happens to lower the premium, after all I don't have to tell them they are on the policy and there is a chance they might need to drive it...... a 0.000000001% chance but it is still there. This cant be legal surely?

Yes, absolutely legal. Of course you will need to know enough about Doreen and Mabel to know their dates of birth, when they passed their test and details of any accidents or convictions. The usual info you need to give about additional drivers.

[Zeeky]

TheBear said:

Ok, I'll concede the points.

It doesn't seem honest to me but if it is viewed as simply being astute and Insurance companies are aware and have no issue then that's the way it is and I guess it falls short of criminal conduct.

Edited by TheBear on Friday 18th July 11:08

Not everyone has the same level of integrity which is why others will not necessarily agree with you as to what constitutes honesty.

There is no objective line that can be drawn between being astute and being less than completely honest so it doesn't really matter what people think of your views.

I suspect that as more people become aware of this loophole over time the difference in premiums will shrink as named drivers become less representative of the actual risk to insurers

[Aretnap]

barker22 said:

So I am assuming I could add a long list of named drivers on my policy? doreen and mable down the road who have 60 years no claims from their 250 miles a year they do and no accidents etc. How about anyone else random that just happens to lower the premium, after all I don't have to tell them they are on the policy and there is a chance they might need to drive it...... a 0.000000001% chance but it is still there. This cant be legal surely?

Why not? I've had my wife on my policy for the last five years or so. In that time she's never driven my car, and she has no intention of ever driving it (she has a rather nicer, newer car which we use when we go away together, and mine mostly just gets used for commuting). She's on there because on the off-chance that she ever does need to drive it I don't want to have to ring up the insurer first and pay a £25 fee to add her, and because she lowers the premium so why would I not?

Nobody seems to think there's a problem with that, so what's the difference between adding a wife who'll probably never drive my car, and adding a neighbour or a distant relative who'll probably never drive it either?

Insurers know full well that not everybody you add to your policy will necessarily drive your car regularly, or at all. If it mattered to them they could ask you to divide your named drivers into people who'll definitely drive your car a lot, people who might drive it occasionally, and people who'll probably never drive it but hey, you never know. The fact that they don't ask that suggests that it doesn't matter to insurers, so I'm not sure why it should matter to anyone else either.

[Jon1967x]

Zeeky said:

I suspect that as more people become aware of this loophole over time the difference in premiums will shrink as named drivers become less representative of the actual risk to insurers

Its not a loophole - its a statistical model that tells the insurance companies that a lone driver is a higher risk than somebody that puts a certain type of other person on their policy, all other things being equal. Not every person you could add would lower the premium and the main driver is key to prevent parents sticking kids on a car the parent then never drives.

We can guess the reasons why its "sometimes" cheaper. It doesn't matter. The fact is the wife could have taken her husband off, asked a friend and stuck them on and probably got the same benefit, possibly a better price.

[TwigtheWonderkid]

It could be that insurers have stats to show that a sole driver on a policy where they are the only driver is a higher risk that a sole driver who has other people named on their policy that never drive. For reasons I've already given. If that were the case, they wouldn't look to close the loophole because it isn't a loophole at all.

[98elise]

TwigtheWonderkid said:

It could be that insurers have stats to show that a sole driver on a policy where they are the only driver is a higher risk that a sole driver who has other people named on their policy that never drive. For reasons I've already given. If that were the case, they wouldn't look to close the loophole because it isn't a loophole at all.

That's exactly how insurance works. The insurance company use their historical data to judge risk. They then sell insurance based on your risk profile. That's why they ask particular questions and not others.

For example they ask where the car is normally kept (Garage/drive/road). If it made no difference to risk they wouldn't bother.

In the case of a named driver, the amount of driving they do makes little or no difference, otherwise they would ask (as they do with the main driver).

They won't even care why its a lower risk, only that there is evidence that it is.

[Vaud]

98elise said:

That's why they ask particular questions and not others.

Agree. Sadly some mix it up with, "and when is you household insurance due for renewal...." which is not a risk factor, it's a cross sell.