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A recent study by a national personal injury firm has criticised insurers for exaggerating ‘crash for cash’ statistics in order to justify the price hike in motor insurance premiums.
‘Crash for cash’ is a term given to staged crashes, where one or all parties involved plan the incident, then submit fraudulent compensation claims.
The Insurance Fraud Bureau (IFB) published a report in November 2012, claiming that just under 15% of all personal injury cases are linked to fraud, costing the insurance industry £392 million a year. A separate report conducted a year later by Westminster’s Transport Select Committee estimated the fraudulent cost to have more than doubled to £811 million in 2013.
The head of policy at Thompsons Solicitors, Tom Jones, has said that the bureau cannot support these figures and as a result, they commissioned their own research. They submitted eight Freedom of Information (FOI) requests to police forces up and down the country. They discovered that over half – including London, Manchester and Scotland – had no data or statistics relating to ‘crash for cash.’ The only police force to comply with the request was Derbyshire Constabulary, which recorded only two investigations in the last three years.
Mr Jones said, “…the impression given is that there is a ‘pandemic’ of fraud and that’s why premiums are so high, but it appears that simply isn’t the case.”
The director of the IFB, Ben Fletcher, spoke in defence of the report that the figures “…published in 2012 were calculated using a robust methodology, which valued organised fraud rings identified by the IFB’s advanced software within cross-industry claims data. ‘Crash for cash’ remains a significant threat to the insurance industry, with the IFB currently managing 110 live investigations valued at over £120 million.”
Caroline Sergeant, senior personal injury solicitor and technical manager at the Liverpool office of Paul Rooney Solicitors, said:
“All fraud is costly to insurers and ultimately to honest customers. We have robust methods for identifying and ruling out fraudulent claims. Our focus is on representing honest clients and seeking justice for victims of genuine road traffic incidents. “