The Association for British Insurers (ABI) has dubbed Britain the “whiplash capital of the world” as fraudulent car insurance claims rose by 34% to just short of 60,000 last year.
The Insurance Fraud Bureau (IFB) reported that ‘Crash for Cash’ claims cost the country in the region of £400million annually, whilst a report by ABI estimated that insurance fraud as a whole costs Britain as much as £2billion a year.
This figure results in an average of £50 being added to each individual car insurance policy to cover the shortfall.
The ABI also recently reported that whilst bogus or exaggerated claims have dropped in number, the value of these claims rose to £1.3 billion in 2013.
‘Crash for Cash’ is the name given to accidents caused deliberately in order to make a claim.
This may be by cars suddenly stopping or flashing their lights to allow vehicles through before pulling out with the intention of causing a crash and placing the blame on the other party.
Money is then claimed from the insurance of the fraudster’s victim for damages.
The cost of these claims can often be inflated by claims for removal vehicles and injuries that may be fabricated.
The IFB’s report added that regardless of how it’s committed, this type of fraud is far from victimless as “honest policyholders ultimately pick up the bill for ‘Crash for Cash’, with increased premiums covering the costs of fraud.”
Steph Waldren, a former officer with Lincolnshire Police, said one of the main problems with preventing and identifying perpetrators of this type of fraud is that “the intention of causing an accident is hard to prove.”
A recent survey conducted by the RAC highlights the public’s concerns about this scam, with 26% of those asked saying that dashboard cameras should be made compulsory to help tackle the problem and 72% saying they would install a camera if it lowered their insurance premiums.
Pete Williams, RAC head of external affairs, said “We hope that the introduction of cameras will have a positive impact on car insurance claims” as ‘Crash for Cash’ claims are “becoming more prevalent on UK roads.”
The ABI was set up in 2006 to specifically to look into false claims, with the Insurance Fraud Enforcement Department set up in 2011 to help tackle and prosecute fraudsters.
by Tom McBeth (October 2014)