Crash for Cash is on The Rise!
Crash for cash cases are driving up the total cost of insurance fraud, according to insurance brokers. The value of fraud detected by one insurer was £90m in 2017, up 5.4% compared to 2016. Figures show a 6.3% increase in the number of fraudulent claims uncovered. Whiplash fraud continues to present the biggest threat to customers. These types of cases are pushing premiums up, putting innocent motorists at risk and taking their money. It is estimated that crash for cash cases cost the UK £340m every year. But who pays for it? Honest motorists and honest businesses.
What is Crash for Cash?
Crash for cash incidents happen in two common ways. Firstly, vehicles will slam on their brakes for no obvious reason in front of you, giving you no time to react. Alternatively, a vehicle will indicate to let you out at a junction before deliberately driving into you. In both cases the driver will insist it’s your fault and will have their insurance details pre-printed to give to you. They will often exaggerate their claims including hire cars, recovery and whiplash injuries. These criminals look for drivers with insurance and who are less likely to cause a fuss. Mothers with children on board and the elderly are usually targets, yet businesses are often targets too.
An example from 2014 shows an HGV being targeted in a crash for cash scam. The driver of a BMW brakes in front of an HGV on the motorway, giving the driver no time to react and driving straight into the car. Thankfully the driver and business had protection, having installed a forward-facing CCTV system. As a result this allows the insurance company to quickly write off the claim as fraudulent. Preventative action can save a company or driver a lot of money which would otherwise tie up claims or court cases.
What about civil liability?
A Civil Liability Bill, to be introduced in the coming years, could add another level of deterrent for fraudsters. The bill will cap the value of whiplash pay-outs and require claimants to provide medical evidence as proof. It would also increase the minimum value of personal injury claims in court from £2000 to £5000, forcing claimants to go through the small claims court. Furthermore, this means victims will be unable to reclaim the cost of legal representation, resulting in fewer claims and smaller costs.
How can you protect yourself and your business?
- Be aware – always keep your eyes out for hazards, look out for erratic drivers and leave plenty of room between you and the car in front.
- Beware of flashes – do not assume that if a driver flashes their lights it’s safe to pull out of a junction. Use your own judgement and proceed carefully.
- Protect yourself – Vehicle CCTV cameras can be beneficial for protecting yourself and others from fraudulent claims. Especially useful for commercial vehicles who can be a target for fraudsters. Installing one camera can dramatically reduce insurance premiums and provide evidence to settle disputes.