Fraudulent insurance claims are to be forwarded to gardaí as part of a new bid to combat misleading claims which insurers say are resulting in increasingly expensive policies.
The Motor Insurers Bureau of Ireland (MIBI) wants to reduce the number of fraudulent motor claims which it says are also causing “hundreds of injuries” each year.
The group estimates they receive hundreds of claims every year where the evidence does not support the case being made. They say up to one in eight insurance claims are “suspicious”.
Providing false or misleading information on a motor claim is considered a crime and those convicted of the offence face up to 10 years in prison or €100,000 fine.
However, according to the MIBI Fighting Fraud report published on Monday, it is very difficult to prove an allegation of insurance fraud within the Irish legal system.
The bureau says more than €1.8 million has been generated in fraud savings so far this year with an additional 158 “suspicious” cases currently under investigation.
The company pays out between €55 to €60 million a year in insurance payments and last year received a total of 2,922 claims.
Staged collisions, gross exaggeration of injuries, opportunistic fraud and deliberate falsification of crashes are just some of the “suspicious” claims highlighted in the MIBI report.
In certain cases, claims are submitted after two vehicles collide by prior agreement or a vehicle is deliberately driven into a stationary object.
Taxi drivers can also become victims when, during the course of a journey, a taxi is deliberately struck by another vehicle so the passengers can claim for personal injury.
The MIBI is a not for profit company that helps compensate victims of road traffic crashes caused by uninsured and unidentified vehicles.
On Monday it outlined a plan reduce the level of fraudulent claims by flagging requests that do not have enough information.
It said claims flagged through the new system would be investigated and the group was working closely with gardaí on such cases.
The MIBI said it would “legally contest” cases where the evidence does not support the claim being made.
David Fitzgerald, chief executive of the MIBI, said the number of fraudulent insurance claims was on the rise and increasingly putting lives at risk.
“Insurance fraud can’t be tolerated. It is a scourge on Irish roads.” He said it not only added to the cost of insurance premiums but also resulted in hundreds of injuries because of collisions linked to fraudulent claims.
“Our belief is that by thoroughly investigating unsubstantiated claims and by making it much more difficult for them to succeed, over time we will see a drop in the number of suspicious claims submitted. Ultimately we believe that will benefit all Irish motorists.”
A spokesman for the Department of Justice said any person who dishonestly gives evidence or information that is false or misleading in relation to a personal injuries action could face criminal prosecution for fraud in a legal action.
The Cost of Insurance Working Group, which was set up to address the rising cost of motor insurance, has recommended the Department of Justice establish an insurance fraud database which would detect fraud patterns and provide information on previous fraudulent activity. A working group set up by the department is currently considering the funding and content of the proposed database.
A spokesman for AA Ireland underlined that fraudulent claims were not the only factor in the rise of the cost of insurance policies, citing the collapse of Quinn Insurance and preparations for the collapse of Setanta Insurance as contributors.
He said vehicle owners could expect premium costs to drop in the coming months following the Supreme Court ruling that the State pick up the Setanta bill.
“The industry is quite slow to react but there’s no incentive any more for insurers to prepare themselves to have to pay out for Setanta. So in theory we should see premiums starting to drop.”
Insurers also claim the recent rise in premium prices is based on the industry returning to more realistic rates.
However, a briefing document for the Minister for Transport released under the Freedom of Information Act last year revealed that insurers were raising prices “to boost profitability” in the wake of the economic downturn.
The Central Statistics Office reported in May that there had been no monthly increase in the cost of motor insurance for three consecutive months.
