Car insurance fraud types revealed in a new study

Car insurance fraudsters most likely to use low-speed crashes to claim compensation, with claims for non-existent passengers up, too

Rear end shunt - car crash

The different types of car insurance fraud in the UK have been revealed in a new study that shows fraudsters are most likely to use low-speed crashes to seek compensation. 

According to Churchill Insurance, car insurance fraud is on the rise with low-speed crashes now accounting for over a third of all insurance fraud (see table below). The report also identified fraudsters are increasingly claiming compensation for non-existent passengers. Claims for "phantom passengers" grew to eight per cent last year, up by two per cent from 2015. 

Data from the Association of British Insurers reveals there were some 70,000 cases of motors insurance fraud in 2015, accounting to 192 instances every day. Fraudsters continue to scam the industry for roughly £800 million a year, with an average payout at a whopping £11,428. Insurance fraud is estimated to add £90 to the cost of an average policy for honest drivers. 

New measures aim to tackle car insurance fraud

Last year the Government announced new plans to kerb insurance fraud by introducing claims caps for minor whiplash injuries. The new measures are expected to save motorists £40 on their insurance.

The Government has also increased the upper limit for the small claims court for personal injury claims from £1,000 to £5,000. 

Fraudulent claim type

 

%  of fraudulent claims in 2016

 

Low-speed impact (when both vehicles collide at low-speed e.g. in a car park)

 

36%

 

Organised fraud rings

 

15%

 

Phantom passenger (when the claimant was not in the vehicle at the time of the collision)

 

8%

 

Induced Road Traffic Accident (RTA) (when one motorist deliberately causes the accident – for example, by slamming on their brakes - and the innocent other party collides with the vehicle)

 

8%

 

Staged Road Traffic Accident (RTA) (where both vehicles are complicit in the fraud e.g. the accident may have been staged)

 

7%

 

Exaggerated loss/ damage (when an accident occurs and the claimant exaggerates the circumstances)

 

3%

 

Indemnity/policy issues (when the customer has lied when taking out the policy)

 

2%

 

Mark Chiappino, counter fraud manager at Churchill said: “Fraudulent car insurance claims are on the rise, as opportunists try their luck at making exaggerated claims after a genuine accident or reporting injuries to phantom passengers, which have a knock-on financial effect on innocent customers.

“When involved in a collision, whether it’s your fault or that of another driver, try to gather as much information at the scene to make the claims process easier. If you are involved in an accident and it is safe to do so, it is advisable to take down the contact and insurance details from the other motorist, take photos of any damage caused and contact details for any witnesses.”

Have you ever witnessed insurance fraud? Tell us in the comments below...

Recommended

UK child car seat, booster seat and baby seat laws explained
Child seat booster seat car seat
Consumer news

UK child car seat, booster seat and baby seat laws explained

Detailed info on latest baby seat and child seat regulations, plus when it’s OK to use a booster seat
24 Mar 2021
8,800 drivers on UK roads with 12 points
Driver with second highest points doesn't have licence
News

8,800 drivers on UK roads with 12 points

There are currently 8,800 drivers in the UK still driving despite having enough penalty points to trigger an automatic ban
9 Mar 2021
VED road tax: how much does it cost?
car tax calculator
Consumer news

VED road tax: how much does it cost?

Confused by VED road tax? Our comprehensive guide explains how much you'll pay on your next car
4 Mar 2021
Budget 2021: Fuel duty frozen for 11th consecutive year
News

Budget 2021: Fuel duty frozen for 11th consecutive year

Chancellor scraps plan to increase fuel duty in bid to keep cost of living down during ongoing Covid-19 pandemic 
3 Mar 2021

Most Popular

'Nissan has been quietly building an advantage over electric car rivals'
Opinion Nissan EV
Nissan

'Nissan has been quietly building an advantage over electric car rivals'

Steve Fowler thinks Nissan is in a great position to build on the Leaf's success
8 Apr 2021
New Citroen C5 X flagship crossover set to offer ‘ultimate comfort’
Citroen C5 X - front
Citroen C5

New Citroen C5 X flagship crossover set to offer ‘ultimate comfort’

The new flagship Citroen C5 X will arrive with petrol and plug-in hybrid power, and looks set to cost from around £27,000 when it arrives in the UK in…
12 Apr 2021
Volkswagen Golf GTD vs BMW 120d
VW Golf GTD vs BMW 120d - main
Volkswagen Golf GTD Hatchback

Volkswagen Golf GTD vs BMW 120d

Can the Volkswagen Golf GTD or BMW 120d prove diesel isn't dead?
10 Apr 2021