Insurers should pay police to tackle fraud, say MPs

Insurers should pay for a dedicated police unit to tackle a rise in fraudulent claims, according an influential group of MPs.

Fraud is a key factor behind soaring premiums and could lead to deaths in deliberately staged accidents, according to the Transport Select Committee.

Committee Chair Louise Ellman said: “The police made plain to the committee that ‘staged accidents’ are on the increase and that, so far, we have been lucky there have been no fatalities resulting from such incidents. That luck may run out unless the insurance industry acts rapidly to help the police target this kind of insurance fraud.”

A report by the committee also calls for more transparency into ‘the merry-go-round of “referral” payments’ by insurance companies to ‘law firms, rescue truck drivers, vehicle repairers, credit hire firms, claims or accident management companies and medical experts’.

Ellman said: “Consumers are largely unaware of how much money moves around the insurance industry in this way when they make a claim. They deserve to see where their money is going.  If insurance companies cannot agree a method by which to improve transparency around referral fees, then the Government should step in, with legislation if necessary.”