Car insurance premiums driven up by staged accidents, say MPs

Wednesday, March 16th 2011
Staged crashes 'drive up car insurance costs'
The transport committee has revealed fraud is leading to higher premiums.

Staged car accidents are driving up the cost of motor insurance, MPs have said.

The cross-party transport committee told the House of Commons that these incidents are increasing and warned they do not just have a negative impact on drivers' premiums.

"We have been lucky there have been no fatalities," remarked transport committee chair Louise Ellman.

"That luck may run out unless the insurance industry acts rapidly to help the police target this kind of insurance fraud."

MPs also called for greater transparency from the sector on the "merry-go-round" of referral payments made in relation to motor claims.

Insurers, law firms, rescue truck drivers, vehicle repairers, credit hire companies and other parties typically send and receive money following an incident.

Simon Douglas, the director of AA Insurance, praised the "thoroughness" of the inquiry and said it has helped to raise public awareness regarding many of the factors that influence premiums, such as fraud and personal injury costs. 

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