How fraudsters are using low-speed collisions to scam the insurance industry… and adding up to £90 a year to YOUR car insurance
New research has revealed the most common fraudulent motor insurance claims, as incidences rise year on year
FRAUDSTERS could be adding as much as £90 to the average driver's insurance policy, with false insurance claims on the rise.
New research suggests that cases of car insurance fraud in the UK have increased since 2015, with low-speed collisions now accounting for over a third of all claims.
, the study found that claims where small accidents were exaggerated rose to 36 per cent, while incidences of people trying to claim injury compensation for passengers not present at the time of the crash was up by two per cent in the last two years.
The rise in the most common type of fraud involving low-speed collisions suggested an increase in cases of innocent motorists being accused of inflicting damage in tight areas such as car parks.
Fraudsters often exploit existing wear and tear, dents and other vehicle issues by claiming they are the fault of a random driver.
Low-speed collision claims also see opportunists exaggerate or make false claims about injuries suffered during an accident, with whiplash the most commonly feigned injury.
Induced and Staged road traffic accidents, where fraudsters deliberately cause a collision in order to make a claim, together made up 15 per cent of all incidents.
MOST COMMON TYPES OF CAR INSURANCE FRAUD
- Low-speed collision (e.g. car park impact) - 36%
- Phantom passenger (claimant not in car at time of incident) - 8%
- Induced accident (one motorist deliberately causes crash) - 8%
- Staged accident (where both parties are involved in deliberately orchestrating the crash) - 7%
- Exaggerated loss/damage - 3%
- False policy declarations - 2%
According to the Association of British Insurers, an incredible 70,000 fraudulent motoring claims were made in 2015, costing the insurance industry approximately £800 million.
Fraudulent payouts will inevitably have a follow-on effect for the average driver, as insurers are forced to raise the cost of premiums to compensate for the losses.
that the rise in fraudulent claims is estimated to add as much as £90 to the cost of the average annual policy for British drivers.
“Fraudulent car insurance claims are on the rise, as opportunists try their luck at making exaggerated claims after a genuine accident or reporting injuries to phantom passengers, which have a knock-on financial effect on innocent customers," Mark Chiappino, counter fraud manager at Churchill said.
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Chiappino also offered some advice to drivers who are concerned they may have been involved in a potentially suspicious collision.
“When involved in a collision, whether it’s your fault or that of another driver, try to gather as much information at the scene to make the claims process easier," he said.
"If you are involved in an accident and it is safe to do so, it is advisable to take down the contact and insurance details from the other motorist, take photos of any damage caused and contact details for any witnesses.”
WHAT TO DO IF YOU ARE INVOLVED IN A 'SUSPICIOUS' ACCIDENT
- Always exchange details with other driver and call 999 if anyone has been hurt
- Retrace circumstances of incident to see if anything unusual happened
- Make note of all personal details of other driver and passengers e.g. clothes, height, ages
- Ask other driver to make similar notes of what happened
The reports follow measures introduced by the Government early last year in an attempt to reduce the extent of fraudulent payouts.
A claims cap was introduced to limit the payback of minor whiplash injuries, while the upper limit for the small claims court was increased from £1,000 to £5,000 for personal injury cases.