What is motor insurance fraud?
Fraudulent insurance claims affect the lives of innocent people, both directly through accidental or purposeful injury or damage, and indirectly as these crimes cause insurance premiums to increase. Insurance fraud poses a very significant problem, and governments and other organisations are making efforts to deter such activities.
The Insurance Fraud Bureau (IFB) now has a ‘Cheatline’ which is powered by Crime Stoppers. Any information received via the IFB Cheatline will probably result in an investigation either by the insurance company or the IFB. Serious matters will in some cases be referred to the police.
Initially, the aim of the insurance company is to validate any claim. The insurance policy will be checked against information provided by the proposer to check for fraud. To help you understand which scenarios some insurance companies will treat as acts of policy fraud, here are some examples:
Where a policyholder deliberately:
- Claims to be the main user of a car, when the true main user is someone else, such as a son or daughter
- Provides details of the usual overnight location of a vehicle, when the true location is different
- Provides details of the usage of the car, when the true usage is completely different (this could involve something as simple as not declaring you use your car to commute to work or use of it in connection with your work or business)
- Provides false answers to the quotation questions e.g. date of birth or occupation
Where an insurance company uncovers evidence of fraud they may declare the policy void from the time the fraudulent act took place. This means they could treat the policy as never having been in force and may result that you are not covered in the event of a claim.
The insurance company may also use the information for fraud prevention purposes and this could include wider financial service industries, such as banks and building societies.
If a claim is established as valid following the insurance company’s initial enquiries, the next process would be that an Insurance Assessor would examine damage to the vehicles. Where fraud is suspected, specialist engineers may be appointed who are committed to combating fraud. They will combine forensic examination of vehicles with extensive fraud database searches to establish whether a claim has been exaggerated or staged.
Often fraud cases tend to be divided into three separate categories:
- Exaggerated claims. In an exaggerated claim, the policy holder has sustained a genuine accident but has then exacerbated the damage to their vehicle.
- Staged accidents. In a staged collision, vehicles are often deliberately crashed to show damage but the accidents have not occurred as described on any claims forms. Sometimes even an innocent driver will be drawn into a fraudulent activity such as when a fraudster deliberately rams an innocent party’s vehicle.
- Non-existent accidents – In non-existent accidents often a policy holder will claim damage has been caused during a collision when in fact damage had been sustained elsewhere.
Fraud cases will frequently include claims for personal injury, excessive hire fees, such as replacement car hire, loss of earnings and personal effects.
What happens, however, when you make a genuine claim and somewhere during the process you are accused that it is a fraud?
Imagine a case where you have been involved in a genuine collision that resulted in catastrophic engine failure; as a result an assessor accused you of fraud, alleging that you staged a collision to obtain an insurance payout because of a costly engine repair. Or, if a driver in front of you removed his brake light bulbs and braked heavily and you were unable to avoid a collision with them. Whilst it does happen, not everything that falls into an ‘insurance fraud category’ makes the policy holder a fraudster.
When accused of fraud, most people will need professional help through a solicitor or reputable claims handler to deal with their case. Any subsequent action will depend on the nature of the allegation. The Collision Investigation Team at Keith Borer Consultants deals with insurance fraud claims including during the initial enquiry process from solicitors. Our experts can often provide a complimentary short review of individual cases both for Claimants and Defendants in related cases and always work to an agreed written estimate of fees. Their expertise and experience in reading and interpreting assessors’ reports, witness statements, examining physical damage, stolen vehicle examinations and studying other associated documents provides an excellent basis on which to establish the likelihood of fraud in an individual case. The Collision Investigation Team also provides expert evidence to the courts and each member is recognised as an expert witness in this field.
In a recent case the owner of a mini excavator, Mr B reported his machine stolen. A similar vehicle was recovered and the police suggested the vehicle was that belonging to Mr B. Mr B was charged with conspiracy to defraud, as it was alleged the excavator had previously been stolen but was now in the possession Mr B, who fraudulently reported it stolen to claim the insurance money. The vehicle was examined by one of the vehicle examiners at Keith Borer Consultants, who was able to provide evidence that it was unlikely the recovered vehicle was the same as the vehicle reported stolen by Mr B. Subsequently the charges against Mr B were dropped.
If you would like to discuss your case with one of our team, please call the Durham office on +44 (0)191 332 4999.