Top five car insurance scams that cost all motorists

　



 We look at the tricks fraudsters use to claim cash from insurers, pushing up your premiums.

By Nicole Blackmore

Drivers are facing huge increases in their car insurance premiums thanks to fraudsters who make money by submitting false claims.

Over the last four years the average annual premium has increased by 89pc to £840, according to the AA.

Insurers say a large part of this rise is caused by false claims, which push up costs for honest motorists.

Here we list the five most common scams being pulled on our roads that are hitting your back pocket.

1. Causing intentional accidents

For years, fraudsters have been purposefully causing accidents with other motorists in order to claim cash from insurers. A common ploy is to slam on the brakes suddenly for no reason so the driver behind crashes into the back of the car.

Another trick, which has hit the headlines today, is a so-called flash-for-cash tactic. Criminals flash their headlights to indicate to another driver to proceed, only to then crash into them.

The BBC claims these scams are costing insurers hundreds of millions of pounds a year.

Detective Inspector Dave Hindmarsh from the Metropolitan Police told the BBC: "This is a growing problem. Financially, it costs insurers £392m a year - that impacts on motorists as it's an extra £50 to £100 on every person's premium."

2. Making fraudulent hit-and-run claims

Some drivers intentionally write off their own car but claim they were the victim of a hit-and-run accident. Unless there are surveillance cameras in the area, it is very difficult for insurers to prove whether or not there was another vehicle involved.

3. Staging car thefts

Another approach used by fraudsters is to dump their vehicle and claim it was stolen. Some go as far as to set the car on fire, or drive it into a river or lake, to make the claim appear genuine. They fill in a police report and, once the car is found, lodge a claim for the cost of the vehicle with their insurer.

4. Submitting false injury claims

The most common injury associated with car accidents is whiplash – and it is notoriously difficult for insurers, and even medical professionals, to prove or disprove. Fraudsters often claim for the injury itself, plus loss of earnings, and some submit claims even though they were not in the car at the time of the accident.

The Association of British Insurers (ABI) said every year 570,000 people put in claims for whiplash. This drives up premiums by a total of £2bn, adding £90 to the average driver's premium.

Whiplash now accounts for 78pc of all personal injury claims in the UK, compared with just 3pc in France. We explain why this is, here.

5. Insurers colluding to maximise profits

It is not always motorists running the scams. Earlier this year The Telegraph carried out its own investigation and found insurers are "steering" motorists to garages in their approved repairer network in order to maximise their own profits.

Some body shop owners and car makers said they are concerned that insurance companies and their agents are primarily focused on keeping costs down and some fit non-genuine parts or repair instead of replace parts, potentially compromising the safety of drivers.

Source: money@telegraph.co.uk