Motor insurance scams remain the most common and expensive type of fraudulent claim, according to The Association of British Insurers’ (ABI) annual detected fraud figures.
The statistics, released by the ABI on the 28th August, also revealed that in total 55,000 dishonest motor insurance claims worth £629 million were uncovered in 2018.
The average detected fraudulent motor insurance claim now tops £11,000, with more than 150 uncovered daily. The risk for the industry is significant, and insurers are exposed to various types of motor insurance scams ranging from staged accidents to more opportunistic tactics.
‘Crash for cash’ scams remain one of the biggest threats, with one uncovered case involving a 16-person gang which was broken up and resulted in sentences totalling 33 years in jail. The news follows AX’s recent findings which revealed that the ‘crash for cash’ problem costs the industry £340 million annually.
“While there are a vast number of fraudulent insurance claims, the most concerning thought is the thousands that go undetected by insurers. The costs incurred will be damaging to both insurers and the automotive industry as a whole.” explained Neil Thomas, Director of Investigative Services at AX.
“All is not lost, though. Whether it’s by installing advanced telemetry devices that deliver accident reconstruction to clarify fault or working with suppliers including accident aftercare providers, insurers can mitigate the risk of succumbing to false claims.”