Insurers are increasing theft excesses and premiums for plant and equipment because of high fraud rates and a failure to understand the sector, the National Plant and Equipment Register has said.
Register director Tim Purbrick said insurers continued to lose money covering plant and equipment because they did not underwrite it correctly.
"At the underwriting stage insurers have not received equipment schedules from their clients, so have not known the risk and unscrupulous clients have consistently undervalued their fleets, leading the insurer to receive less premium than they should," he said.
"To put this in perspective, when you insure your motor car the insurer wants to know all about you and your vehicle before they'll even give you a quote.
"With plant and equipment, the underwriter only requires your own estimate of the value of your equipment fleet."
Purbrick said this also lead to large numbers of fraudulent claims, which some insurers accounted for up to a quarter of all plant and equipment claims.
The sector also suffers from high theft rates, due to a lack of police interest in investigating such crimes.
"Insurers are now throwing risk back at clients, with increased theft excesses and rising policy premiums," Purbrick said.
"They're also insisting on their clients adhering to a number of risk management activities."
He said a number of underwriters would make registration with the national register mandatory for cover from 1 January 2003.
