Insurance Fraud Bureau Research Shows Fraudulent 'Crash For Cash' Insurance Claims Reach Record Level

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Approximately 30,000 contrived accidents are staged each year according to the Insurance Fraud Bureau (IFB) and the average cost per claim is in the order of £17,000. In 2009 insurance companies paid out something like £350 million in fraudulent claims which added about £44 to the annual premium of every honest motorist.

30,000 contrived accidents are staged each year according to the Insurance Fraud Bureau

Approximately 30,000 contrived accidents are staged each year according to the Insurance Fraud Bureau (IFB) and the average cost per claim is in the order of £17,000. In 2009 insurance companies paid out something like £350 million in fraudulent claims which added about £44 to the annual premium of every honest motorist.

The fraudulent and ongoing ‘Crash for Cash’ scam is continuing to concern insurance companies and cause premiums to increase for every honest motorist in the country. The fraudsters stage accidents, usually targeting innocent motorists who are unaware of what is happening, in order to claim on the targeted party’s insurance. The usual procedure is for the fraudster to brake suddenly on an open road or when approaching a roundabout causing the innocent motorist to run into the back of them.

The scam, which insurance companies have been aware of for several years, started in the north-west of England and subsequently spread over into Yorkshire, but recently released statistics reveal that the crime is spreading to other parts of the country. Birmingham is now the top hot spot, closely followed by Liverpool, Blackburn, Manchester and Leeds. East London is placed sixth and North London ninth.

Sgt Mark Beales of the Greater Manchester Police told the BBC “What these fraudsters tend to pick on are people who are single mums or elderly people, people who are less likely to cause them any issues. They also target drivers of commercial vehicles, because drivers tend not to care as much if they’re not driving their own vehicle.”

A spokesman for Staveley Head, one of the country’s leading van insurance specialists, said “We are aware that these criminals target van and truck drivers, but frequently it is difficult for the insurance company to prove that the accident has been staged with criminal intent. However, insurers are becoming more vigilant and will instruct investigators if there is any suspicion of fraud. Most businesses, and hauliers in particular, are feeling the pinch during this recession and it is not helpful when their transport costs are increased by losing their no claims discount bonus in this manner.”

In recent years many insurance companies which operate in road risk insurance cover have not done so at a profit. The market is very competitive and they are reliant on profits made in other sectors of insurance to subsidise this activity. The returns on their investment funds have also drastically reduced in the last two years, leaving them with little alternative other than to pass the cost of this fraudulent scam on to other motorists.

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Ashley Peters
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