The insurance sector is pledging a relentless campaign to stamp out motor insurance scams, but new threats are emerging. We take a look at the issues hitting the headlines.
Motor fraudsters are also targeting liability claims
Crash-for-cash claims have dropped by £60m since 2012, but liability fraud continues to rise, according to new figures from the Insurance Fraud Bureau (IFB).
They show that total crash-for-cash scams were valued at £336m this year, down from £392m in 2012. IFB director Ben Fletcher told Post Magazine that some gangs were moving out of motor and into liability fraud, such as slip and trip.
Worrying statistics behind ‘crash for cash’ scams
It seems that for every piece of good news suggesting the crash for cash problem is getting under control you need two studies suggesting the opposite to make up for it. An Insurance Fraud Bureau study revealed that one in 10 personal injury claims can be linked to suspected scams, while the average value of organised ‘crash for cash’ fraud rings was £1.3 million.
Meanwhile an Ipsos Mori survey revealed 73% of the public believed ‘crash for cash’ is a major problem in the UK, with 71% of motorists worried about sustaining injuries in staged crashes, and nearly eight in ten drivers concerned about rising premiums due to fraud.
Tough line is demanded to deal with sharp-practice CMCs
The Association of British Insurers (ABI) is calling for a crackdown in unscrupulous claims management companies (CMCs). The move coincides with a 3.5% hike in Insurance Premium Tax (IPT) that was implemented on 1 November.
Insurance Age quoted Rob Cummings, the ABI's manager for general insurance, as saying: "With the introduction of the higher rate of Insurance Premium Tax in November set to push up average premiums, the need to tackle rogue claims management firms is vital.”
Call for more stringent claims management regulation
Rob Cummings was again in the media spotlight when the Independent reported that the ABI wants claims regulation shifted from the Claims Management Regulator to the tougher remit of the Financial Conduct Authority. "The current system is failing to provide enough of a deterrent to rogue firms," he said.
Whiplash issues predicted to be less of a problem in next 5 years
Richard Mason, deputy director for Civil Justice at the Ministry of Justice, told the ABI Conference 2015 that he does not think whiplash claims will be the problem in 2020 that they are today, according to a tweet from Ben Fletcher, director of the Insurance Fraud Bureau.
Fraudsters are handed tough sentences by Irish court
Members of a seven-strong scam gang have been sentenced by Cork Criminal Court in Ireland for staging car crashes to make fraudulent insurance claims, the Irish Times reported.
One offender was jailed for 12 months and six others received suspended sentences and/or community service. The crashes involved two vehicles rear-ending each other in 2011 and 2012. Judge David Riordan described the incidents as ‘an attack on the level of trust between valid claims and insurance companies’.