Cut car cover costs at a snap

Wednesday, 18 June 2014

MOTORISTS are being encouraged to install cameras on the dashboards of their cars to protect no-claims discounts and avoid premiums soaring after accidents.

Claims managers at AA Insurance Services and Direct Line have said camera evidence is increasingly being used to establish fault after a crash.

Dashboard cameras, common in many other countries, were virtually unknown here a few years ago. However, sales have mushroomed in recent months, putting the potential value for the market at more than £2.5bn.

Tony Parker, 70, of Reading, Berkshire, came to appreciate his camera when he was the victim of a “cash for crash” scam. He had been involved in an accident a few years previously, which had resulted in a claim and his premium going up, even though he did not believe he was to blame.

As a result, the retired aeronautical engineer bought a camera. “I held my hands up and accepted the higher premium because I had no evidence that I wasn’t at fault. It made me think, though, if something similar happened again, I’d want proof,” said Parker.

Last year he was glad of the decision. While he was driving down a slip road approaching the dual carriageway to High Wycombe, Buckinghamshire, the car in front slammed on its brakes.

Parker, who was driving a Jaguar estate car, said: “Estates tend to have a blind spot, so you need to look over your shoulder at certain junctions. I looked away briefly and, when I turned back, the guy in front had slammed on his brakes so hard, there was smoke coming off his tyres.

“I managed to brake at the last moment, but, inevitably, hit him. Of course, it looked like I had caused the accident because I had run into the back of him.”

The other car owner lodged a claim for nearly £30,000, including whiplash injuries to the driver and two passengers. At this point Parker smelt a rat. He said: “There was only one passenger. When I reported this to my insurer, Direct Line, it said: ‘It’s your word against his.’ ‘No, it isn’t,’ I replied. ‘It’s his word against my camera.’”

Once Direct Line saw the footage, it was convinced it was dealing with a “cash for crash” scam. A file was submitted to the City of London police’s insurance fraud enforcement department, which took the case to court.

More than 30,000 people were victims of a “cash for crash” scam in the past year, insurer LV said.

Even a small bump can inflict financial pain if it results in the loss of a no-claims discount. This will automatically push up your next premium, unless drivers have paid extra to protect it. Depending on the insurer, the discount can cut premiums by between 60% and 80%. Similarly, excesses can add up to nearly £1,000.

Esure’s Adrian Webb explained: “Your no-claims discount is the biggest single factor under your control when it comes to setting your insurance premium. There is nothing else that will cost you as much.

“Say you have a £300 premium. Even if your premium doesn’t rise following a crash, losing part of your no-claims discount will cost you an extra £200 or £300.”

Insurance policies should include details of any no-claims discount, plus a schedule for its withdrawal.

However, Ian Crowder, insurance manager at the AA, said the amount withdrawn could depend on the age of the driver or the seriousness of the accident. For instance, a 25-year-old with five years’ no-claims would probably lose all this after a crash. Crowder said: “He would be dealt with more harshly because of his age.”

To illustrate, a 25-year-old driver with a two-litre Golf GTI and an insurance premium of £673 might see that leap nearly £800 to £1,471 after an accident. He would also have to pay the first £250 excess, so the prang would cost him more than £1,000.

Similarly, a 45-year-old with full no-claims driving a Porsche Boxster 3.2-litre might find a nine-year no-claims discount drops to three years. This would push up his premium by £666 — from £544 to £1,210. He would also lose his £280 excess.

The AA added that if his no-claims was cancelled it would not offer him cover at any price due to the seriousness of the accident or if he had another bump that year, however small.

This could explain why nearly half of male drivers (44%) say they would be interested in buying a dashboard camera, according to research carried out by Populous among 25,000 AA members.

Women tend to be less confident of their own driving skills, with only 2 in 10 expressing an interest.

Simon Henrick, of Direct Line, said: “Unfortunately, after an accident the human reaction is to blame the other driver. We always suggest that, if possible, you get an independent witness to prove that it wasn’t your fault.

“Having a camera ensures that drivers have an independent witness. The camera never lies. The recording helps us determine liability and defend any claim against our customers.” If the camera proves you were a victim of another’s bad driving, you are treated as a “no fault” claim. This means no loss of your no-claims bonus, no excess penalty, and no punitive rise in next year’s premium.

Cameras do not currently make drivers eligible for automatic discounts on premiums, although the AA believes that in time they could be used to reduce costs, as telematics has for young drivers — a group perceived as high risk but where technology that monitors their driving has helped cut accidents by nearly a third.

Crowder said: “People are likely to drive more carefully, keeping to speed limits and such like, if they have a camera. Insurers would treat them as cautious drivers.”

In Parker’s case, court action for submitting a fraudulent claim was taken against the other car owner. He was not in the vehicle at the time and escaped with a caution. Police wanted to charge the driver with intentionally causing an accident but could not trace him.