While taking the driving test will make you a lot safer on the road, it unfortunately doesn’t do much to protect you from the carelessness of other drivers – or the increasingly deliberate and dangerous activities of some scammers. The phrase ‘crash-for-cash’ relates to the illegal practices of engineering fake car accidents, or exaggerating damage, to defraud insurance providers. It’s a problem that is on the rise – Aviva has claimed that in 2013 alone it uncovered more than £110 million of fraudulent claims, up 19% on the previous year, and that it’s establishing 45 problematic claims every day.
The Insurance Fraud Bureau estimates that this kind of scheme costs £392 million annually. Frequently it involves organised gangs, who will often co-opt professionals such as doctors or car engineers to exaggerate injuries and damages so the claims can be inflated. In some cases reported accidents won’t even have taken place at all, which accounts for around a quarter of all the claims Aviva is investigating.
A victimless crime?
One reason given for the popularity of fraudulent insurance claims is that it is a victimless crime, but of course this is a misconception. The more claims are made against insurers, the more they are forced to increase its premiums to cover costs, meaning that every driver on the road pays the price for this kind of criminality. Plus, one also has to consider the risks to lives caused by arranging crashes with vehicles driven by innocent, unsuspecting members of the public. 80% of motorists worry about being injured in a deliberate crash.
Whiplash is among the most common reported injuries sustained in car accidents, whether genuine or not, caused by the neck being suddenly moved back-and-forth or sideways during the collision. In 2013 it was estimated these claims have added £90 to the cost of the average insurance policy.
Other reasons given for the increase in crash-for-cash scams are the struggling economy, with people looking for opportunities to make money however they can, and the perceived ease with which successful claims can be made with no real risk – one thing insurance companies often complain about when told to get their houses in order is the lack of effective deterrents. Many convictions result merely in suspended sentences, community service or small fines. Hardly a threat when you consider that the average value of organised schemes investigated by the IFB is close to £2 million.
A fundamental disconnect
Despite all this though, and frequent coverage in the media, another study by Aviva found that two-thirds of people wouldn’t report insurance fraud if they learned about it. Bizarrely, research by the IFB also found that despite 1 in 7 people thinking crash-for-cash was a big problem in the UK, 10% of people would consider getting involved in it themselves!
This indicates a fundamental disconnect between recognition of the issue and the potential repercussions. Perhaps if people could see exactly how much insurance fraud cost them every year through increased premiums they might not be tempted, or less willing to turn a blind eye.
So, how can you avoid becoming a victim yourself? Defensive driving is obviously good advice. Keep a good distance between yourself and the car in front, and if anyone flashes you to give you right of way, beware, as they may have ulterior motives.
But a determined scammer is going to engineer an incident no matter what, so some insurers suggest, if you’re particularly worried, installing a windscreen-mounted camera which can record the details of the incident, showing you’re not at fault.
The AA advises looking for independent witnesses to the accident, taking notes and photographs, and never admitting to liability at the scene. And if you suspect fraud, then you should report it either to the police or your insurer.