Insurance scams staged by organised criminal gangs are driving a growth in ‘crash for cash’ scams, says insurance broker Bluefin.
The warning comes ahead of national Car Crime Awareness Week which begins Monday 16 May.
The practice of staging deliberate car crashes – so-called induced accidents - to make false insurance claims, cost insurers about £350m in 2009, according to the latest available figures from the Insurance Fraud Bureau (IFB) and the practice is on the rise.
Peter Castle, head of customer proposition at Bluefin, said: “Historically, crime rates have risen during times of economic difficulty and I believe this could be what we are experiencing with the recent rise in ‘crash for cash’ scams.
“Spiralling living costs, rising fuel prices and redundancy are pushing people to their financial limit, and sadly some are turning to illegal methods to make ends meet.”
Despite a number of high profile convictions, including that of a Luton gang who were jailed for a combined 11 years last month for engineering crashes, Bluefin is concerned that awareness of the practice among motorists is still very low with as many as 41% of British drivers never having heard of the crime.
“Motorists need to be aware of the dangers and pay extra attention to people braking suddenly in front of them for no apparent reason, or otherwise driving erratically. Staged car accidents do not only cost honest drivers millions every year but they are potentially very dangerous so drivers need to be on the look-out for suspicious behaviour,” said Castle.
The IFB estimates that around 30,000 accidents were staged last year which is pushing up insurance premiums by an average of £44 per driver.
According to statistics provided by the Association of British Insurers (ABI) motor insurance fraud as a whole cost the industry between £840m and £2bn in 2009.