It is estimated that motor insurance fraud costs the UK insurance market in excess of £1billion a year. A further £2.1billion of insurance fraud is said to be undetected annually. This figure includes ‘crash for cash’ scams and ‘ghost broking’. But what do these phrases mean and how can they be avoided?
Crash for Cash
Does as it says on the tin! This is when a fraudster or fraudsters purposely crash to claim cash. In many cases incidents will involve innocent road users who have been targeted for the staged act of fraud. The IFB (Insurance Fraud Bureau) have created this list of crash for cash hot spots.
Ghost Broking and Car Insurance
Ghost broking fraudsters sell fake policies over the phone, online and even in person. The policies are designed to look real but contain false information. A prime target is young drivers searching for cheap car insurance.
Remember purchasing a fake policy has consequences; your car may be seized or you could have to pay a fixed penalty notice of £300 and lose any premiums paid. A fake policy is treated the same as having no insurance at all!
Don’t get scammed
Easier said than done, right? But there are a few things you can do to ensure you are purchasing legitimate cover. Using reputable companies that have been suggested by friends and family may be a good place to start. But there are plenty of other ways to check;
- You can check your vehicle is registered on askMID.com; a database of valid insurance.
- Give the insurer named on your policy a call, check they have the correct personal and vehicle details. And if a payment plan is required ensure you receive confirmation of this.
- Before a quote was offered what information was requested? Some fraudsters will quote without knowing all of the relevant information such as your postcode, claims history and annual mileage. Others will offer exceptionally low rates, or ask to be paid in cash upfront – trust your judgement and if it sounds too good to be true, it most probably is.
Reporting Car Insurance Fraud
Several organisations exist to help protect and warn consumers of fraudsters. One such organisation is the IFB which specifically focuses on the detection and prevention of insurance fraud. To report a fraudulent act you should contact CheatLine either over the phone 0800 422 0421 or online. The IFB also manage the IFR (Insurance Fraud Register) an industry wide register of known fraudsters which aims to protect and keep premiums down for honest consumers.
There are plenty of ways to ensure your protection, just trust your judgement.