Fraud is a key factor increasing the cost of car insurance and must be tackled, a Government report has concluded.
The report, entitled The Cost of Motor Insurance and put together by the cross-party Transport Committee, said that the law was increasingly being exploited through false personal injury claims and that a dedicated police unit to tackle the issue should be established.
Police who submitted evidence for the report told the Committee that "staged accidents" are an increasing problem, with drivers in many cases risking a fatal crash. The Committee also said that the insurance industry needs to become more transparent, particularly with regards to referral payments made in connection with car insurance claims.
Louise Ellman, Chair of Transport Committee, 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," she added.
The Committee MPs have urged the Government to address the report's findings as a matter of urgency and the British Insurance Brokers' Association has already pledged its support on the issue.
