We’ve all heard the stories and seen the dashcam clips of the ‘accidents’ that are clearly manufactured simply to create an insurance claim. But the lengths the fraudsters go to and the level of organisation around this activity is quite shocking!
In this article we look at how and why this activity is on the rise, what the insurance companies are doing about it and how you can protect your fleet from these types of claims.
A Growing Problem
To some degree the rise in insurance fraud is attributable to the improved efficiencies that insurance companies sought in dealing with claims. Faster payouts meant less oversight and so the fraudsters stepped in and took advantage.
These accidents are not designed to simply pay out for vehicle damage, although they may use a vehicle that is already damaged and the ascribe the damage to the accident, and so net the difference. However, the majority of these accidents are created to pay out on minor injuries, such as whiplash and other soft-tissue injuries that cannot easily be disproven. These types of incidents and ‘injuries’ can generate payouts of many tens of thousands of Pounds/Euro, especially where there are multiple vehicle occupants.
The most well-known accidents are those where are car pulls in front of a larger vehicle at a relatively slow speed, leaving very little space between the two, and then slams the brakes on so that the larger vehicle shunts the car from behind. Many fraudsters have mastered this technique to the point where a car following suddenly spews a number of occupants, who immediately jump into the fraud car. All these ‘occupants’ then claim on the insurance. The remaining driver in the following car acts as their witness to seal the deal.
But that’s not the only thing they do. Approaching traffic lights, you may stop leaving a reasonable distance to the car in front, only to then have them reverse into you. They later claim that you shunted them! That nice person who flashes to let you out of a junction, but then drives into you and claims they never flashed you at all and you pulled out in front of them – yes, that happens too.
As this activity has grown, the insurance companies have sat up and taken notice. Today, the likes of Churchill Insurance reported that exaggerated claims were up 36% in two years and “Phantom Passenger” claims (passengers not present at time of accident but claiming afterwards) was up 2% in the same period.
Another unnamed insurer said that they detected nearly a quarter of a million pounds worth of bogus claims every day last year!
While Aviva said it had seen a 9.5% year-on-year jump in the number of fraudulent claims it declined in 2016.
Here are the most common types of vehicle insurance fraud by type:
MOST COMMON TYPES OF CAR INSURANCE FRAUD
The Association of British Insurers reported that, an incredible 70,000 fraudulent motoring claims were made in 2015, costing the insurance industry approximately £800 million. Today the overall insurance industry figures suggest that around one in ten personal injury claims are linked to suspected "crash-for-cash" scams.
Overall, Auto Express reported that the rise in fraudulent claims is estimated to add as much as £90 to the cost of the average annual policy for British drivers.
What Is Being Done?
A higher level of scrutiny and investigation into these claims is now conducted. Sting operations have even been used and have caught large numbers of fraudsters involved in organised fraud rings. Additionally, maximum pay out amounts on minor bodily injuries have been reduced significantly, increasing the risk/reward ratio for the fraudsters and so acting as a key deterrent.
According to reports, large insurance companies detected more than £85 million worth of fraud last year. This equates to a stunning £232,000 worth of bogus claims averted every day.
But despite this, the figures continue to rise.
How Can You Protect Your Fleet?
It sounds obvious that you need to equip your fleet with vehicle cameras, but there is a little more to it than that if you want to truly protect yourself:
If you only have a forward-facing camera, you will the often vital detail of the lead up to a manufactured accident. What was the other vehicle doing as it approached from behind and beside you. Its actions and the demeanour and number of occupants inside the vehicle are all vital evidence. Also, not all accidents happen in front of you, as in the example where they flash you to let you out of a junction, only to then drive into you. Having multiple cameras gives more a better chance of capturing key incriminating footage that can clear you.
What happens after an accident is as important as the accident itself. If your camera system does not continue running for a period of time after the ignition is off, you will miss all this vital footage. With multiple cameras installed as well, you’ll capture footage from all around the scene, including people who jump out of other cars and secrete themselves in the other vehicle.
In the event of one of these accidents, your driver will quickly inform you that something is awry. That’s when you need to jump into action to secure the footage! Without remote access you need to wait until the vehicle returns to base. However, there have been occasions when the police is arrested the driver, thinking they were at fault. It is therefore essential that you can immediately logon, preview and download the footage.
The majority of low-end dashcam type systems do not provide this functionality.
These days, a new twist is the use of an accomplice who looks for vehicle cameras and makes the dashcam disappear. Systems designed for commercial use are built to be tamper-proof and in the case of ProVision systems, the smart-box recorder is hidden in the vehicle and installed in such a way as to be extremely difficult to remove. As a fleet operator/manager, you will be acutely aware of this growing problem and may have already experienced it. International fleet operators are particularly at risk with levels of fraud being much higher in southern and eastern Europe. Talk to us about protecting your fleet with ProVision’s range of commercial-grade vehicle camera systems. Contact us today or complete our online quote form.
As a fleet operator/manager, you will be acutely aware of this growing problem and may have already experienced it. International fleet operators are particularly at risk with levels of fraud being much higher in southern and eastern Europe. Talk to us about protecting your fleet with ProVision’s range of commercial-grade vehicle camera systems. Contact us today or complete our online quote form.