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Motor Insurance Scam

Being involved in a car accident can be many things: traumatic, painful, shocking, scary and expensive. But how many of us would have thought to add ‘deliberate’ to that list? Horrifyingly, around 15% of all road collisions are staged for financial gain.

car theifSome scammers are exploiting the system, causing deliberate low-speed collisions for financial gain. Some unfortunate, unsuspecting driver will be on the wrong end of this plot, but it spreads even further: the victims include anyone paying for an insurance policy, because the increased pay-outs ratchet up the cost of your premium. And we aren’t talking peanuts here; according to Auto Express, the average driver could be forking out as much as £90 extra on their policy just to cover the costs of fraudulent claims.

The problem could be set to worsen, as it seems that this kind of crime is on the rise. More than a third of all claims can be attributed to low-speed collisions, many of which are either deliberate or exaggerated. Low-speed collisions account for 36% of all fraudulent claims.

Scams include flashing at a junction to permit another waiting driver to pull out, and then deliberately crashing into them. Other cons force drivers to rear-end the scammer, automatically placing blame on the driver behind, when the scammer has either slammed on their brakes without warning, or gone as far as removing their brake lights altogether.

In 2015, a whopping 70,000 claims cost the motor trade insurance industry around £800 million according to the Association of British Insurers. That money has to come from somewhere, so all drivers of insured new and used cars are having to foot the bill.

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It’s impossible to avoid falling victim to these scams altogether, but there are steps you can take to help protect yourself. Firstly, keep your own policy watertight: ensure your information is kept up-to-date and accurate, including change of address and medical conditions. Additionally, be prepared to collect as much evidence as possible at the scene of an accident. If anyone was injured in the collision, call 999. Take photos of the scene, including any damage, as 3% of false claims are based on exaggerated loss. Write down, or ideally, photograph the registration or trade plates of the other car. Note down the other driver’s insurance and contact details, as well as names and numbers of any witnesses who can support you. Also make a note of passengers in the car: how many people? What do you estimate their ages to be? Some scammers will claim whiplash injuries for 4 passengers who never existed: so-called “phantom passengers” account for 8% of fraudulent claims.

According to the RAC, dumping a vehicle and claiming it as stolen is not an uncommon practice, and ‘fronting’ is something that most people will have encountered. Fronting is when a high-risk driver avoids a high premium by claiming an older, more experienced relative as the main driver. If the younger driver is really the sole user of that vehicle, then statistically, they will be costing as much as someone who has paid an honest premium based on their risk factors.