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Car insurance scams

Between 2009 and 2013, car insurance premiums increased by 89% to £840, according to the AA. But insurers say they are not to blame; instead they are seeing a rise in insurance scams which push the price up for everyone. Here we take a look at three of the most popular type of insurance scams.

1. Crash for cash

Crash for cash scams cost the insurance industry around £400 million each year. The result? Higher premium for everyone else. Detective Inspector Dave Hindmarsh from the Metropolitan Police told the BBC: "This is a growing problem. Financially, it costs insurers £392m a year - that impacts on motorists as it's an extra £50 to £100 on every person's premium.”

The fraudsters purposefully cause accidents with other drivers in order to claim back cash from insurers. How do they do it? Slamming the breaks on causing the motorist behind to crash into the back of them is a common ploy. There is also the increasingly popular flash for cash tactic whereby they flash their headlights as if letting the other driver out, before crashing into them.

Luckily in the last few years insurers have started to pay more attention to this problem and now use experts who can sport patterns in claims. Quite often they’ll do a bit of digging and uncover the criminal gangs responsible. Many people also use dashboard cams now, which can be useful when you have been a victim of a crash for cash scam.

2. Highway Robbery

This is a version of cash for crash that sees criminals crash into their victim before demanding money for them there and then. This sinister scam uses the same tactics as crash for cash (breaking, flashing and even straight up reversing into other vehicles) but instead of claiming for cash via the insurer, they intimidate drivers into handing over cash on the spot. These fraudsters prey on the law that states the driver behind is at fault and use this to scare the driver to pay up. They also often target the elderly and young.

Insurers want to make it clear those motorists who feel threatened in this way should call the police and ask them to attend the accident and explain what is going on. You should never hand over money in this occasion; instead take down their name, address, phone and registration number. You should also write down how many people were in their car and if you have a camera or phone with you, take a photo of the accident.

Some key behaviour to look out for in these instances is pre-written down insurance details (why would they have that readily available?) and also a very calm demeanour for someone who has just crashed.

3. False Injury Claims

One of the most common types of injury claimed for is whiplash. Did you know Britain is known as the whiplash capital of the world? We have over 1,500 insurance claims for that injury made every day, which experts reckon add about £90 to the cost of car cover. To put it into perspective, 78% of personal injury claims in the UK are for whiplash, compared to just 3% in France.

The problem with whiplash is it’s very difficult to prove and disprove, even for medical professionals. So people can get away with falsely claiming for it and claim for the injury itself along with loss of earnings. There have even been cases where people have claimed for whiplash even if they weren’t in the car at the time! The Association of British Insurers (ABI) has said that each year around 570,000 people put in claims for whiplash. This drives up premiums by a total of £2bn.


published: 05/02/2016 09:32:58

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