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How to avoid falling victim to car insurance scams

  • 3, Aug 2020
  • Read time: 5 mins

Being aware of car insurance fraud will ensure that your insurance stays valid and keeps you safer when you're out and about on the roads. We've shed some light on the most common scams to keep an eye out for and how to avoid committing car insurance fraud.

Car being towed.

Common types of insurance fraud

Did you know that falsifying information, like not telling your insurer that you’ve modified your car or that your circumstances have changed, is classified as car insurance fraud?

The Association of British Insurers (ABI) reported that average insurance fraud now tops £12,000 with 1,300 insurance scams uncovered every day.

There are a number of different ways in which you can get caught up in car insurance fraud by being dishonest on your policy application.

Fronting

If you state a ‘named driver’ as the ‘main driver’ to bring your premium down because they are classed as a lower-risk driver, this is committing car insurance fraud known as ‘fronting’. When you’re in the process of getting your car insurance quote, be sure to correctly state who the ‘main driver’ is.

Change of circumstances

It’s important that if your circumstances change, you update your car insurance policy. Changes in circumstance that we need to know about includes, but isn't limited to:

  • Address
  • Where you keep your car (driveway, garage, roadside)
  • If you start using your car to commute to work
  • Change of job title/career
  • Penalty points
  • Mileage amount if you are using significantly more than you were quoted for

By keeping these details all present and correct, your car insurance will stay valid and keep you clear of fraud.

If you’re a MORE THAN customer, you can log into your account to view your policy and update any changes to your car, address or driver information without paying an admin fee.

Not declaring modifications

If you’re tempted to make modifications to your cars appearance or performance, you must remember to also update your car insurance policy. Modifications can include, but are not limited to:

  • Adding a spoiler
  • Changing the exhaust
  • Changing the alloys
  • Tuning up your engine

It’s key that you tell your insurer about any modifications made by you or previous owners of your car in order to keep your insurance valid. Honesty is definitely the best policy.

Common types of car insurance scams

There is another side to car insurance fraud that you can fall victim to. From other drivers purposefully causing an accident with you or attempting to sell you fraudulent car insurance policies, it’s important that as a driver, you recognise the common car insurance scams.

The Association of British Insurers (ABI) reported that in 2018, there was an insurance scam committed every minute. The high volume of scam related claims has had a knock on effect, causing the cost of car insurance premiums to increase £50 that same year.

Being aware, safe and vigilant as a driver can help prevent you from being involved in the following car insurance scams.

Crash for cash scams

Crash for cash scams occur when an innocent motorist is forced into a collision by another driver. The result of these calculated accidents gives fraudsters the chance to make false car insurance claims, in order to receive compensation payments. They often try to claim for injury damage, loss of earning and hire vehicles.

Driver’s’ committing this scam allegedly don’t pick their victims at random. Action Fraud have reported that elderly men and women, and mothers with children in the car are most likely to be targeted by this scam. Fraudsters believe they are the most likely to have full insurance and least likely to argue with the driver that caused the accident.

They are becoming increasingly common on our roads, so it’s important to understand what to look out for and what to do if you suspect you have fallen victim to a crash for cash scam.

What to look out for:

  • Cars that are braking suddenly in front of you
  • Cars with broken brake lights
  • Tailgaters
  • Cars that swerve in front of you on motorways or dual carriageways

Flash for cash

Flash for cash is another crash scam to look out for. This is when a driver uses their headlights to flash another driver at a junction, signalling that they are letting the other car go first. When the car moved, the car that flashed them then crashes into them on purpose.

What to do if a driver flashes their headlights to you:

If a car flashes you, the Highway Codes message is to “never assume that flashing headlights is a signal inviting you to proceed”. Use your judgement and always proceed with caution if a car has signalled allowing you to manoeuvre.

What to do if you're a victim of a 'crash for cash' or 'flash for cash' scam

Contact your insurer at the event of an accident with the following information:

  • Consider whether you need to call the police to report the incident
  • Don’t admit fault
  • Note down the make, model and registration number of the cars involved
  • Make a note of the time, date, location and weather conditions
  • Ask for the full name, address and date of birth of the driver and any additional passengers in their car
  • Ask if anyone has any injuries and make a note of them at the scene of the accident
  • Take pictures or a video of the vehicles involved in the accident at the scene
  • If anyone saw the accident and they have stopped, see if they will share their details as independent witnesses of the accident

Ghost broking

Ghost broking is the name given to an insurance scam where fraudsters sell fake car insurance policies. According to Action Fraud, there were over 850 reports of ghost broking between 2014 – 2017, with losses from individuals and organisations totalling £631,000.

Ghost brokers tend to target men in their 20s, using social media platforms to get in touch with them. If you have purchased invalid car insurance, you could be liable and could be at risk of:

  • Points on your driving licence
  • Your vehicle being seized
  • A fixed penalty notice
  • Being liable for claims if you’re involved with an accident
  • Average loss of £769

To check whether you have purchased insurance through a registered insurance provider, you can search their full name or business name on the Financial Conduct Authority.

What should you do if you're a victim of fraud?

Try and stay calm. If you have been affected by a fraudulent car accident, your safety is a priority, so ensure that you have received the right medical treatment if you need it.

If you are a MORE THAN car insurance customer, when you call to make a claim, we will ask you a number of questions and if we believe that you have been a victim of a fraudulent accident, we have a fraud team that can help you through the claims process to ensure the best possible outcome for you.

Find out more about our car insurance

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