MPs: Fraud making cover expensive

Car insurance is increasingly expensive because of fraud, according to MPs.

They said a special unit of police should be established to help detect false claims.

Over the year to October 2010 insurers raised their average quoted costs of comprehensive cover by 29.9%, the AA told the Commons Transport Committee in an evidence submission.

And the "appalling" death and injury rate among younger drivers can be reduced if the Government devises a more difficult driving test, the MPs said in a report.

Louise Ellman MP, who chairs the committee, 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.

"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."

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