Motor Claims in the Current Climate
Posted on 21st April 2023 at 12:58
The current economic climate has had a significant impact on motor claims, with claim costs rising due to inflationary pressures. In particular, the increase in economic hardship has led to an increase in motor claims. Since individuals are struggling financially, they may be more likely to file a claim in the hopes of receiving compensation for their losses. Whereas before, financial pressures weren’t as severe, so companies could cover the costs themselves to keep this off their claims experience, and in turn keep their renewal premium down.
Additionally, global supply chain issues and a lack of available parts and materials have majorly contributed to rising claims inflation in the motor industry. Not only does it impact the claim costs, this also increases the longevity of open claims because parts are not readily available at local dealerships, so they are having to be ordered in for overseas. As a result, insurance companies are facing increased pressure to manage the rising costs of motor claims, and close claims in a timely manner.
Another impact of the current economic climate on motor claims is an increase in fraudulent claims due to financial desperation. With so many households impacted by inflation and the rising cost of living, the potential for fraud is likely to increase. In fact, leading UK insurer Aviva reported a 13% increase in insurance claims tainted with fraud in 2021. Insurance fraud occurs when individuals commit deliberate deception to obtain an illegitimate gain.
Furthermore, unemployment is on the rise. With more individuals out of work, there has been a significant increase in the number of claims filed for vehicle theft or break-ins. As people out of work become more desperate for money, they tend to lean towards criminal activities for a fast pay-out, such as the theft of burglary of a vehicle. Commercial vehicles are one of the most common vehicles that are broken into, robbed, or stolen because of the likelihood of high value tools and equipment being stored in the back for easy pickings.
Although there are just some things that we can’t change, such as the supply chain, appointing an Insurance Broker like CentriCity to manage your claims is definitely in your best interest. Our in-house claims management allows us to monitor and track the progress of all your claims under one roof, where our experienced team specialise in navigating through the current economic climate to get the fastest results for you and your business.
Get in touch with our team today!
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