On Monday 11th July 2011 at 8pm on BBC One, Panorama infiltrated a crash for cash criminal ring in order to gain insight and to investigate how criminals today are actually helping to drive up motor insurance premiums. Fraudulent car insurance claims are costing the UK insurance companies £2bn per year!
The UK insurance industry has over just four years, seen a 43% rise in personal injury claims arising from a car accident. Just four years ago an average of 552000 personal injury claims resulting from a car accident were made which compares to the 791000 which were made last year!
Unfortunately it is these claims amongst others which have meant that insurance companies have to pay out more in claim compensation than what they are actually taking in premiums. Drivers today who are involved in an accident that was not their fault are more likely to make a claim. This has resulted in a society that has a claims culture and it is that time old saying, “if you can’t beat them then join them!”
Where drivers are not to blame in an accident 60% would make a personal injury claim and even lie and exaggerate their injuries which have been compared to just 20% who would make a personal injury claim 7 years ago.
One of the most common personal injury claims is for whiplash, it cannot be proved and doctors have to take the patients word for it. However when presenting a medical note to insurers they usually believe it and pay out when in reality the person could have lied or exaggerated.
Panorama uncovered a gang who actually would arrange to have a car damaged, make a claim and award you with money as well as taking a fee for themselves. An undercover camera placed on a used Volvo car unearthed the group in full force. The car was dropped off by the undercover reporter and the details of the crash were discussed. The ring leader even drew a map out and wrote down some details of where the staged accident would occur, where individuals in the car would be seated, which road it would be on, what parts of the car were damaged, details about the other car – a Vauxhall Zafira and other various lies!
Of course the accident was not really going to happen there, the car was taken and left on a quiet road before being picked up at midnight and taken to a scrap yard. It was there where the other car explained in the details – the Zafira was actually parked. The undercover reporters Volvo was then driven into the side of the Zafira as well as into another car showing that it was a much larger project than first imagined. However, the damage was not enough and so a crow bar was taken to it! Two weeks later a claim was made to the insurance company, they were claiming off the Volvo insurance and the criminal gang even paid £800 upfront for allowing them to do so. The below details are shocking:
This all added up to £26,588 and this figure doesn’t include further claims for items like court costs. When Panorama went back to visit the office no one was there, they went to the scrap yard and no one was there then on phoning they managed to get hold of one of the gang members and she agreed to meet at the office for an interview. However on turning up they got a surprise – she was not present but instead had phoned the Police on them. Denying all knowledge of car insurance fraud it would be the Police who would want a word with her after what they managed to uncover!
However shortly we will see more crimes like this tackled and this is because in January 2012 a new specialist Police Fraud Unit, based in London will be introduced. It will provide additional operational capability for focus on tackling insurance fraud.
Unfortunately though next year we will probably see another hike in premiums, partly because of criminals and crash for cash but mostly because of a dysfunctional system which is now under exploitation from evasive compensation culture surrounding our society.