The number of car insurance fraud cases has reached unprecedented levels in the UK with nearly 100 incidents recorded every day as drivers desperately try and lower vehicle costs.
It comes after reports revealed insurers found more than 33,000 cases of fraud took place last year worth £157million.
Out of all the fraud cases, application deception was the most prominent type of fraud with increasing levels of policy abuse, misrepresentation and identity theft being detected including a high number of ghost brokers.
Ghost brokers are criminals who alter policy details to artificially bring down the cost of cover. They often use social media to trick thousands of consumers into fake insurance deals which offer policies that either do not exist or are invalid.
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The fraud insurance cases cost the insurer £430,000 a day
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Ben Fletcher, director of fraud at Allianz UK, said: “Insurance fraud is a serious problem that pushes up the cost of policies for honest consumers and adds to insurers’ costs.
“The vast majority of claims are genuine and our focus as a business is to ensure we settle those promptly, but the sad reality is that some people will go to enormous lengths to make fraudulent claims.”
According to reports 90 cases of insurance fraud costs the industry roughly £430,000 a day with drivers urged to not risk prosecution over fraudulent behaviours.
Fletcher added the increase in fraud cases can be attributed to several factors including the ongoing cost of living challenge and financial struggles which has caused the price of owning a vehicle to skyrocket over the years.
Fletcher stated: “We are resolute in our determination toidentify and defend against any type of fraud and use a variety of methods to detect it. We share information with the police and other insurers to prevent fraud happening and will not hesitate to prosecute cases.
“Potential fraudsters need to understand that if you try and commit fraud, then be warned, you may end up with a criminal record.”
Meanwhile the report detailed how the delivery industry faced particular scrutiny, with a notable rise in frauds involving moped and motorcycle riders attempting to avoid proper insurance coverage.
Across motor and casualty claims, insurers also noted rises in “non-tariff injuries” being reported, moving beyond the traditional whiplash claims.
“Cash-for-crash” scams involving moped riders and couriers deliberately staging accidents in order to get payouts from insurers, saw increases.
To combat this, the Insurance Fraud Bureau detailed how it is currently investigating over 6,000 suspected fraudulent motor insurance claims, many of which could be linked to crash for cash schemes and be worth over £70million.
But Fletcher warned potential fraudsters they “may end up with a criminal record” if caught.In one notable case, the insurercollaborated with another insurer and the City of London Police to prosecute three men involved in a £100,000 cash-for-crash scheme.
The fraudsters deliberately staged a collision involving an Aston Martin they falsely claimed was worth £60,000. The case was uncovered when inconsistencies between the group’s accounts and the actual damage to the vehicles were brought to light.
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More than 33,000 cases of insurance fraud were recorded by one insurer last year
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Following a three-week trial at Gloucester Crown Court in August 2024, a jury found the men guilty of fraud by false representation and perverting the course of justice.
Last year data from the Home Office found that 84,400 fraudulent claims were made in 2023 alone. The Association of British Insurers (ABI) detected claims worth £1.1billion, a 16 per cent rise compared to the year before.
