Fraud, including “staged accidents”, is driving up the cost of motor insurance, according to a report by MPs.
The insurance industry should fund a dedicated police unit to stamp out false car insurance claims, the House of Commons Transport Committee said.
The committee also urged the Government to make the driving test more rigorous to help bring down the “appalling” casualty rate among young drivers.
And the MPs also said that the insurance industry should take steps to make more transparent the habit of insurance claim “referral” payments involving such organisations as rescue truck drivers, vehicle repairers, credit hire firms and medical experts.
In evidence to the committee, the AA reported that average premiums quoted to motorists for comprehensive cover increased by 29.9% in the year to October 2010.
Launching the report, the committee’s chairman Louise Ellman (Labour, Liverpool Riverside) said: “Wider access to justice is to be welcomed, but it has come at a significant cost, with far more personal injury claims being made than in the past.
“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.”
On young drivers and the driving test, Mrs Ellman said: “If we are to curb the casualty rate, especially among young drivers, then it’s essential that the driving test properly prepares drivers for motoring.”
She welcomed the Government’s commitment to making the driving test more rigorous but added: “Proposals for change have been around for years. What matters now is that the Government publishes for consultation the changes it wants to make, with a timetable for implementing them before the next election.”
The MPs also called for a clear timetable to be set for new data-sharing arrangements between the Driver and Vehicle Licensing Agency and motor insurers.
AA Insurance director Simon Douglas said: “At a time when the cost of motoring is soaring, with the cost of unleaded petrol passing the £6 per gallon mark, drivers are looking to the insurance industry to work with the Government to control spiralling claims costs that ultimately fuel premium inflation. For many, especially the young, the cost of insurance is simply becoming unsustainable.”