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Daily Insurance Industry News
Sunday 21st of January 2018
May 29, 2009

‘Crash for cash’ fraud increasing

by David Masters

Story link: ‘Crash for cash’ fraud increasing

The number of UK motorists deliberately crashing their cars to make fraudulent insurance claims is increasing, the Insurance Fraud Bureau (IFB) warned this week.

‘Induced accidents’, or ‘crash for cash’ accidents, as they are more commonly known, involve a driver deliberately causing a crash so as to profit from fraudulent insurance claims.

After the crash, often caused by slamming brakes on a motorway junction forcing the driver behind to crash into them, the fraudsters make claims for damage to their car and for personal injuries they don’t have.

In some cases, they will make personal injury claims for people who weren’t in the vehicle, and use other gang members as ‘phantom witnesses’ who falsely say they were at the scene of the accident and blame the accident on the innocent party.

According to the IFB, induced accidents are becoming a serious problem in the UK, with fraudulent claims adding around £40 to every insurance policy sold to honest drivers.

John Beadle, IFB chairman, said: “The criminal gangs targeting honest motorists are ruthless.

“Innocent lives are being put at risk and fraudulent insurance claims add approximately £40 to every premium paid by honest policy holders each year.”

The Association of British Insurers (ABI) believes that some people are using bogus insurance claims to boost their income during the recession.

“Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats,” said Nick Starling, the ABI’s director of general insurance and health.

 

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