9th December, 2021

The number of detected fraudulent insurance claims fell by 10 per cent in 2020 to their lowest level since 2007, but still cost an eye-watering £1.1 billion, according to figures by the ABI*.

But the value of the average fraud rose to £12,000, up 6 per cent on 2019, with motor and property insurance claims topping the illegal charts.

Detected motor frauds fell by 6 per cent to 55,000 claims, costing £602 million, while the number of property insurance frauds fell by 10 per cent to 24,000, valued at £111 million.

Some of the most popular scams include:

Fake whiplash claims – hard to disprove, this fraud accounts for 60 per cent of all fraudulent
claims detected by Aviva*, and has prompted calls for a change in the law;

‘Crash-for-cash’ claims - where criminals deliberately stage a car accident, usually by slamming on their brakes so the other car rear-ends them, in order to make a fraudulent insurance claim;

‘Flash-for-cash claims - another deliberate collision setup in which a driver flashes their lights to let another driver out at a junction, before driving into them;

Staged car theft claims – where an owner sets fire to their car, or dumps it into a lake, before reporting it stolen, then sits back and waits for a cash pay out to arrive;

Car insurance fronting – where someone declares themselves as the main driver of a car even though it will be someone else, to reduce costs;

Intentional damage claims – not all house fires are accidental, and people have been caught out damaging their own home to gain an insurance pay out;

Overstating the value claims – when someone intentionally submits a false or misleading claim to receive compensation;

Fake theft claims – where homeowners fake a theft and make a claim for items through their insurance.

The idea that “fraud is a victimless crime is completely false,” warns Mike Haley, CEO of Cifas*, a not-for-profit fraud prevention membership organisation.

“False insurance-claim fraud and fronting insurance policies fraud are often seen as an easy way to make a bit of money without hurting anyone.

First, false insurance claims and fronting insurance policies are illegal.

They can impact on your life and career, making it near-impossible to buy insurance in the future and can even lead to a criminal record.

Second, committing fraud hurts everyone: your neighbours, your friends, people in the area and the UK as a whole.

Insurers have to spend longer reviewing insurance claims and policy requests, premiums go up, and everyone loses out.

Many people are seemingly unaware of the risks they’re running and the consequences it can have by committing everyday fraud.”

In addition to claims fraud, here at One Call Insurance we also see fraud in the form of non-disclosure.  This essentially includes but is not limited to a proportion of customers not declaring claims and convictions.  This could potentially result a policy being cancelled or future claims being rejected or only partially paid.

When purchasing a policy it is really important that you take care to answer all questions honestly. Honesty is the best policy.

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* Please note that the above information has been gathered through secondary research. The information provided is not based on our opinion. You should seek further guidance and information before making an informed decision.