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Insight: putting the brakes on insurance fraud

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Every year, criminals steal nearly £400 million from motorists and fleets using increasingly complex ‘crash-for-cash’ scams that put budgets and lives in jeopardy.

Insurers estimate that £44 in every vehicle policy goes towards paying costs resulting from tens of thousands of staged accidents, which allow criminals to generate profits by making fake damages and personal injury claims.

Criminals target vehicles that are almost certain to be properly insured, so business vehicles and branded vans are a key target.

It has been a growing problem in the UK for nearly a decade, expanding from a small syndicate targeting northern towns to a nationwide epidemic.

Its expansion has been driven by the relative ease with which gangs can generate massive profits once they have caused a crash and made it look like the other driver’s fault.

This normally involves ensuring a victim’s car crashes into the back of a criminal’s vehicle.

In these circumstance, the insurer is more likely to find in favour of the vehicle that has been hit, as it is almost impossible to prove that they didn’t need to brake.

Even the gentlest tap can spark a chain reaction of claims that amounts of tens of thousands of pounds.

Scams can range from bumping up damage costs to claiming for non-existent personal injuries and even inventing passengers.

Fraudsters look to make as much money out of each crash as possible.

Each ‘accident’ can net anything up to £30,000 through a combination of exaggerated claims for costs such as vehicle damage, personal injury, lost earnings, vehicle recovery, storage and replacement car hire.

Recently, accomplices have boarded buses in large numbers in a bid to claim en masse when a criminal in a rogue vehicle pulls in front of the bus and causes a minor bump.

But experts have also warned that it isn’t just criminal gangs who are behind fraudulent insurance claims.

Even when an accident is genuine, some drivers may be tempted to submit false injury claims because of the potential to claim thousands of pounds in compensation, often with little more effort than a phone call to a claims management company.

As a result, fleets have been urged to be vigilant and to work with drivers and insurers to minimise the chances of their businesses falling into the crash scam trap.

A spokesman for the Insurance Fraud Bureau says: “Insurance fraud poses stark risks to society. Innocent motorists are being targeted on roads by fraudsters motivated by greed.

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