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Fraudulent insurance policies

Fraudulent insurance policies are sold by illegal insurance advisers, commonly known as ghost brokers. This is a form of insurance fraud and it occurs most often in the case of motor insurance.

Fraudulent motor insurance policies are sold in two ways:

  • genuine policies are bought from legitimate insurance companies using false information and then doctored before being sold on to customers
  • fake policy documents bearing the logo of legitimate insurance companies are created and sold on to customers

Customers often only find that their policies are fraudulent if:

  • they are stopped by the police for driving uninsured
  • they go to make a claim from their insurer

If you buy an fraudulent policy through an illegal insurance adviser you may find that:

  • your insurance is invalid and you are driving illegally
  • you are unable to make a claim
  • you may be forced to pay costs which could run to millions of pounds if, for example, you were at fault for a crash in which a third party was injured  
  • you have to pay for another, genuine policy

If you suspect you have bought a fraudulent insurance policy

Check if your policy is listed on the Motor Insurers’ Bureau’s Motor Insurance Database, which records the policy details of all vehicles insured in the UK.

If your vehicle is not listed on the database your policy is not legitimate.

Even if your vehicle is listed on the database you should contact your insurer to make sure that your policy is legitimate. If your personal details do not match the information held by your insurer you may have been sold a fraudulent policy.

In either case you should report the company you bought your policy from to the police.

How to avoid illegal insurance advisers

Check that your insurance adviser is on the Financial Services Register before you buy a policy from them.

Beware of insurance policies sold via:

  • social networking websites
  • pubs, clubs and bars
  • newsagents
  • motor repair shops

For more information on purchasing insurance policies see how to buy insurance.

Reporting insurance fraud

If you suspect someone of insurance fraud report them to the Insurance Fraud Bureau (IFB) Cheatline by calling 0800 422 0421 or by filling out a form on the IFB’s website.

ACPO and ABI Memorandum of Understanding

The ABI has worked with the Association of Chief Police Officers (ACPO) to update the Memorandum of Understanding on information exchange. The MoU sets out guidelines on insurers/loss adjusters obtaining information from regional police forces, largely in relation to property crime and fraud. The police will only respond to requests that comply with the MoU, so it is vital that members use the standard forms contained within the MoU. This document can be found on the right hand side.