While the concept of crash for cash is certainly well-known, what may come as more of a surprise is the sheer range of methods that fraudsters are employing in order to secure payouts.
Now, a new study by Churchill Insurance, reported on by Auto Express, has shed some light on the different methods being used. The study reveals that low-speed crashes are unsurprisingly the favoured method, now accounting for more than a third of all insurance fraud. However, the report also highlighted that fraudsters are increasingly using alternative methods too – such as claiming for non-existent passengers, which grew to 8% of all fraud last year, an increase of 2%.
“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,” said Mark Chiappino, counter fraud manager at Churchill.
Here is a breakdown of the top methods used for fraudulent claims according to the research:
- Low-speed impact (when both vehicles collide at low-speed, such as in a car park): 36%
- Organised fraud rings: 15%
- Phantom passengers (when the claimant was not in the vehicle at the time): 8%.
- Induced Road Traffic Accidents (when a motorist deliberately causes an accident with an innocent party, such as by slamming on the brakes): 8%.
- Staged Road Traffic Accidents (cases where both vehicles are complicit in a fraud): 7%.
- Exaggerated loss/ damage (when an accident occurs and circumstances are exaggerated): 3%.
- Indemnity/policy issues (based on a lie when the customer takes out a policy): 2%.