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Crash for cash scams

Making money out of fraudulent insurance claims is a growing problem
How to protect your company car drivers and your business against the consequences

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Deliberately causing an accident to make money out of a fraudulent insurance claim is a growing problem. Beware!

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13 August 2012

Deliberately causing an accident to make money out of a fraudulent insurance claim is a growing problem. Beware!

Writer: TANVIR NANDRA, IAM

Deliberately crashing cars for insurance cash costs insurers £500 million a year. Not only is this is reflected in inflated insurance premiums, but you or your company car drivers could be one of the innocent motorists to get caught up in a deliberate collision.

Crash for cash scams are staged collisions. They come in three types, each intended to get money out of insurers by fraudulent claims.

  • The first is when two individuals deliberately crash into each other. But at least this doesn’t involve an innocent third party;
  • The second is when an individual deliberately provokes a minor collision. Braking sharply so that a following car shunts the fraudster is the simplest example. Fraudulent claims for non-existent whiplash injuries may be added to the damage to the car. Insurers often don’t contest the claims because of the legal costs and anyway, it’s easier just to take it off you by jacking up your premium;
  • The worst is deliberately causing a potentially serious accident by driving dangerously. Tailgating is an example of this; the car behind you drives deliberately close to you, or otherwise distracts your attention from the car in front, also driven by a fraudster. The car in front then brakes sharply so that you shunt it.

Younger drivers are also are greater risk because fraudsters know that they are more likely to settle a claim because they won’t want to bring the crash to their insurer’s notice.

An high profile case in London at the end of last year shows just how much money can be made from crash for cash scams. The team of criminals made almost two million pounds from over 120 claims and were sentenced to over twelve years imprisonment.

  • It’s always easier to ‘scam’ drivers who are careless themselves. If you’re on the ‘phone, how do you contest a fraudulent claim?

So what can you do to protect yourself? Driving with care, and paying attention to the vehicles around you will help. If you feel threatened by a tailgater, pull over somewhere safe and legal to let them past.

Try to anticipate hazards before you get to them by maintaining  a safe following distance from the car in front. If they slam the brakes or behave erratically, you will have more time to react appropriately.

When waiting at traffic lights, junctions or roundabouts, leave enough space from the car in front. You can judge this by making sure you can see the tarmac below the tyres of the car in front. And don’t assume that just because the car in front of you has started to pull away at a junction that they won’t just slam on the brakes again.

While these tips will help you to keep clear of the scams, you may not be able to avoid one. In the event you are involved in a crash, keep your head, swap details with the other drivers, and make a record of the scene. Take pictures, get a full description of the other driver(s) and make a note of the number of people in the other vehicle(s) involved.

Get a good look at the other car too – is it taxed? Does the age and condition look consistent with the number plate?

If you’re suspicious about the collision, don’t ask the other party directly about it at the scene. Collect your information. Take your time so that you can accurately describe what’s happened. Call the police immediately. If there’s a suspected injury, call the emergency services.

The reality is nobody wants to think about being involved in a collision. But it’s important to be prepared in case you are involved in one. Knowing what you must do and taking precautions can make things easier afterwards.

Including a warning about crash for cash scams is a sensible precaution in your business car driving advice and in the long run might help to minimize your business car insurance.

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Matt Morton

Matt Morton

Matt Morton is an automotive content writer for Business Car Manager

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