Last year policy fraud was detected on nearly 2,200 commercial motor insurance policies, valued at over £3m. There were also 11,000 instances of personal motor application fraud, and these are just the dodgy claims that were detected; unfortunately, many more may have slipped through the net.
The City of London police report that motor insurance fraud is estimated to cost the UK insurance market over £1bn every year. They add that this is not just committed by individual chancers and opportunists, but is often the work of highly organised criminal gangs.
Genuine customers pay
An unavoidable consequence of these bogus claims is that premiums for genuine customers are pushed up as a result, with insurance companies forced to find ways to cover their costs. There are many different forms of motor insurance fraud. In some cases, fraudsters may misrepresent their claims history, avoid mentioning criminal convictions, and may even supply false addresses in order to access cheap policies and then make bogus claims.
Application fraud involving using stolen or fabricated personal information is known as ‘fronting’ and may involve the collusion of another party or identity theft.
Fake car accidents
Other examples of fraudulent claim involve reporting non-existent accidents. Pre-damaged vehicles may be relocated to a known accident black spot and then photographed as ‘evidence’ of a collision. In other cases, actual ‘accidents’ may be engineered by criminal gangs. Known as a ‘slam-on’, this manoeuvre involves provoking collisions with innocent motorists and then claiming compensation not just for vehicle damage but for injuries sustained, which more often than not are fictitious.
Aside from the financial sums involved, this type of act also puts innocent parties in potentially lethal danger, damaging their vehicles and often physically injuring them too. Injury claims may include non-existent phantom passengers who, according to the claim, were all in the vehicle and all suffered injury as a result of the accident.
Collisions may also be organised where both parties intend to make fraudulent claims and arrange an accident between their respective vehicles.
Along with the wider insurance industry, Alan Boswell Group is determined to weed out these fraudulent claims, which, as we have seen, are certainly not victimless crimes. We are always vigilant about suspicious applications or claims, in order to protect our genuine customers and to make sure they enjoy the lowest premiums possible. We are always happy to help with genuine claims but passionately believe that bogus applications and accident claims should not be tolerated.
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