What you need to know about car insurance fraud?

Acts of insurance fraud can range from simply omitting some minor details regarding a claim, to fully orchestrating an insurable incident such as a traffic accident. Insurance fraud can also include outright lying or fabricating the details of a genuine traffic accident in order to receive a greater payout amount. In short, if someone carries out an act to obtain improper or undue payment from an insurer, they are committing insurance fraud.

Car insurance fraud is estimated to cost the UK Insurance industry over £1 billion a year. These acts of fraud are typically unplanned and not deliberate, however organised crime is also a large factor in some fraudulent insurance claims.

• • Stolen cars – there are many elaborate ways in which fraudsters can seek to defraud insurance companies through alleged stolen car cases. This includes selling off vehicles to black market repair shops and then claiming on the car as stolen. While insurers will request police reports for stolen vehicles for verification – it can still be hard for the insurer to confirm fraud.

• • Crash for cash – this is perhaps the most malicious form of car insurance fraud as it involves the deliberate entanglement of innocent drivers in fraudulent insurance claims. Fraudsters will often stage accidents involving innocent road users and then demand compensation. Fraudsters can demand that you either pay cash for the staged damages or file a claim with your insurer for a payout. If you believe you have been the victim of a crash for cash scheme, call the police immediately.

• • Ghost brokers – ghost brokering is the act of selling illegitimate or fake insurance policies to customers for the purpose of making a profit. This is typically done by purchasing a legitimate policy from a credible insurer and then amending the policy to be sold to unsuspecting third parties.

• • Imaginary passengers – some fraudsters may claim for injuries to passengers who weren’t there at the accident. It is important to take details of all parties involved in an accident to disprove false injury.

• • Staged accidents – fraudsters can stage accidents to entrap innocent motorists and manufacture an insurable event. This can involve breaking suddenly or even reversing into tailing traffic in order to cause insurable damage.

You can protect yourself from potential insurance fraudsters by taking out policies with reputable providers. If a quote seems too good to be true, it probably is. You should also collect as much evidence as possible if involved in a traffic accident and take your own photos – this can help you defend yourself against shallow and deepfake fraud.

In recent years there has been an increase in the number of shallowfakes involved in fraudulent car insurance claims. Unlike deepfakes which are fake images created with AI – shallowfake images are real photos manipulated with conventional editing software. Fraudsters can use these images to produce convincing images of damage to vehicles in order to make a claim. This is why it is important to take your own photos of an accident involving the vehicles of all parties involved. This can give you a defence in case you are involved in a fraudulent case with a third party.

Being caught up in a fraudulent insurance claim can have some serious consequences. You may be found liable for an accident that wasn’t your fault or you weren’t even involved in. This can lead to you loosing your no claims bonus, higher premiums and possible difficulty finding future insurers. You may also find yourself the victim of a ghost broker that sells you a fake insurance policy – meaning you will essentially be uninsured. This means if you are stopped by police, you’ll be considered to be driving without insurance. Here are some thing you can do to protect yourself from the many forms of car insurance fraud currently being used in the UK.