According to the Insurance Fraud Bureau (IFB), at least one insurance scam takes place every minute in the UK, at a cost of over £3 billion to the economy annually. Insurance Ireland has estimated that the cost of fraud to all insurance companies is €200m and that it adds around €50 for the average motor premium. These shocking figures cover a range of scams, including crash for cash.
Crash for Cash costs around £340m a year in the UK and almost 70,000 personal injury claims a year are thought to be linked to Crash for Cash scams. They cost car drivers around £44 extra per year on their insurance premium.
Generally, run by organised gangs of fraudsters, crashes can involve and impact innocent drivers and road users. In Ireland, AXA insurance identified a large-scale scam in 2017 which encompassed almost 200 claimants and a total sum of over €2 million.
Insurance fraud is a real crime, with victims. As well as the thousands of people injured by deliberate collisions, the financial costs are borne by all consumers. There is no such thing as a victimless crime, says the Association of British Insurers.
The IFB identifies three main types of Crash for Cash scam.
Staged accident – two cars are crashed (or made to look like they crashed) away from the public eye.
Ghost accident – an entirely fabricated claim is lodged in this paper-based fraud.
The final category is where we will focus our attention:
Induced accident – a fraudster induces an accident and involves another driver, making them out to be at fault and therefore liable.
Common Induced accident scams include what the RAC calls ‘Flash for Cash’, i.e. letting someone think they’re been let out of a junction by flashing lights – but crashing into them. Another common one ‘slam on fraud’ i.e. slamming brakes on unexpectedly causing the car behind to rear-end the vehicle. Sometimes a vehicle will hide in the victim’s blind spot, or even disable their own brake lights.
Commercial Vehicles have historically been particularly at risk from these scams. In the past, if an HGV or other commercial vehicle was involved in a collision (note, we’re not using the word accident because these are deliberate!) the assumption was that the larger vehicle was at fault. Claims almost always went against haulage firms and commercial vehicle operators.
Not only is this expensive insurance-wise (in terms of both payouts and rising premiums), but there are huge and costly knock-on effects to having vehicles and drivers off the road. Drivers’ reputations are also damaged unfairly – potentially damaging their careers and putting livelihoods at risk.
Avoiding false claims is one of the main reasons CameraMatics customers give for choosing vehicle cameras. And it works. Time and time again we hear reports of drivers being exonerated because camera footage proves they were not at fault in a collision. McCulla Ireland and A W Ennis are just two examples.
Many insurers and industry bodies now recommend cameras in all HGVs. But, while dashcams are a start, they’re limited in scope and effectiveness and we recommend a proper connected smart camera solution.
Connected vehicle cameras not only improve driving quality by eliminating blind spots and giving the driver a complete view around the vehicle, but they also provide incontrovertible evidence of the crash. And of the events leading up to the crash.
Adding telematics, tracking and sensor data means absolutely nothing is in doubt. It is then extremely easy for false claims and scams to be spotted and avoided.
The CameraMatics Driver App takes drivers through every step of accident and incident reporting, ensuring all key information is recorded and no fault is admitted.
It’s not all about lorries; vans and taxis are also regular victims of crash for cash scams, impacting livelihoods. CameraMatics has a range of solutions to protect all vehicles – and drivers.
Simple changes to your driving will help to minimise your risk of falling victim to crash for cash in the first place. Being aware matters too – if you are involved in a collision be vigilant to the fact the other driver may not be legitimate. Protecting yourself with technology is also extremely sensible – and much more affordable than you may imagine.