Motor Insurance Scam?

Pete1000

I have discovered a practice with an insurance broker which could lead to very serious consequences and may be industry widespread.

I declared a DVLA notifiable medical condition on two seperate applications which were omitted from the quote from the insurer.

Obviously in the event of a claim, the insurer would pick this up and may refuse a claim on the grounds I hadn't made full disclosure.

When I called the broker and questioned this, I was told that they routinely don't pass on medical conditions to the insurer 'because otherwise it wouldn't be accepted to quote on'. In other words, the broker withholds this information to get a more competitive quote.

This needs to be investigated, as it may not be isolated to a single broker and could affect thousands of motorists who believe they have made full disclosure to the insurer.

MattMattMattUK

Pete1000 said:

I have discovered a practice with an insurance broker which could lead to very serious consequences and may be industry widespread.

I declared a DVLA notifiable medical condition on two seperate applications which were omitted from the quote from the insurer.

Obviously in the event of a claim, the insurer would pick this up and may refuse a claim on the grounds I hadn't made full disclosure.

When I called the broker and questioned this, I was told that they routinely don't pass on medical conditions to the insurer 'because otherwise it wouldn't be accepted to quote on'. In other words, the broker withholds this information to get a more competitive quote.

This needs to be investigated, as it may not be isolated to a single broker and could affect thousands of motorists who believe they have made full disclosure to the insurer.

It is not a scam, it is fraud by the broker, and the customer if they approve the policy document omitting their medical conditions once the policy comes back. 

born_again

If the broker is FCA/PRA registered report them.
Report them to the underwriter of your policy.

MyRealNameToo

born_again said:

If the broker is FCA/PRA registered report them.
Report them to the underwriter of your policy.

A broker has to be authorised by the FCA, they won't be registered with the PRA as they only deal with the actual insurer given their remit is to ensure financial viability and its the insurer that ultimately has to be able to afford to pay the claims on the policies its writing. A broker going bust doesnt stop claims payments. 

Pete1000 said:

When I called the broker and questioned this, I was told that they routinely don't pass on medical conditions to the insurer 'because otherwise it wouldn't be accepted to quote on'. In other words, the broker withholds this information to get a more competitive quote.

This needs to be investigated, as it may not be isolated to a single broker and could affect thousands of motorists who believe they have made full disclosure to the insurer.

And this is why brokers must hold substantial Professional Indemnity insurance to deal with liability caused by their misconduct/bad advice etc. 

Who is the broker? It sounds likely to be the wrong information coming from a call centre agent thats repeating company urban rumours rather than it being true. Unfortunately insurance is complex and there are millions of possible questions, you cannot realistically train your staff to answer all of them and so there will be occasional shortfalls. Ideally the agent would ask a manager, though again they may not know either, but realism is contact centres are horrible workplaces with large amounts of pressure on KPIs and having to wait 15 minutes to speak to a manager can ruin your stats for the day if not the week. Unfortunately some will try to answer without knowing the reality, some will overhear their neighbours answering questions and repeat them in the future. 

Many insurers dont rate on disabilities unless the vehicle has been modified and then its the modifications that cause the pricing difference not the missing legs etc. If they dont rate on it there is little point in providing the data and ensuring mappings work etc.