Insurance fraud: the extreme lengths tricksters are prepared to go
Cases of fraudulent insurance claims rose last year, despite efforts by insurers to clampdown on the practice.
Some 130,000 cases were reported in 2015, the equivalent of 2,500 a week, according to data from the Association of British Insurers (ABI) – a 6% increase on 2014.
Fraudulent insurance claims are problematic for insurers and ordinary consumers. The cost of every fraudulent claim paid out needs to be absorbed through higher premiums.
‘Slip and trips’
There was a particular increase in ‘slip and trip’ claims last year. The number of reported cases increased by 36% to 26,900 and the value of the claims rose 14% to £391m.
However, dishonest motor claims remained the most common frauds – 70,000 detected with a value of £800m. The numbers detected had fallen by 2% between 2014 and 2015 and the value had also fallen 10% during this time.
Property fraud also continued to fall – down 2% to £107m but the number of cases rose 7% to 27,500.
Some tricksters are willing to go to extreme lengths. To highlight just how far they’re prepared to go, the ABI has revealed some of the more bizarre cases where cheats were caught out:
- A man was convicted of staging fake road accidents in his Mr Whippy ice cream van. Had he been successful he would have pocketed around £100,000.
- A gang of 19 fraudsters were jailed for between 12 and 21 months after staging a bus crash. CCTV footage showed the gang members laughing as they feigned whiplash injury, despite the footage showing that litter on the bus floor did not move during the incident.
- An aircraft engineer was jailed for two years after he claimed that £189,000 worth of luggage was lost on a flight when the suitcases were shown to have been empty when they were checked in.
- A chef claimed for neck, shoulder, leg, wrist, back and teeth injuries following an alleged fall on a wet canteen floor. CCTV clearly showed her deliberately staging the fall.
- A man claimed £5,000 compensation for neck, back and arm injuries he said he had suffered following a vehicle collision in a retail car park. However, CCTV footage from the retailer clearly showed that the man was not in his car at the time.
- An enthusiastic runner was found to have made a fundamentally dishonest claim for personal injuries after his Twitter account showed him competing in a 10k road race when he was supposedly suffering from severe neck and back pain.
- Claiming for her wedding ring that she said had been lost, a policyholder supplied a photo of the ring that was proven to have been taken the day after the alleged loss had happened.
- A man claimed on life policies of a friend whom he alleged had died in a car crash in Africa. No trace of either the friend or the accident could be found. He subsequently admitted fraud and was jailed for seven years.
James Dalton, ABI’s director, general insurance policy, said: “Insurance cheats do not lack nerve or ingenuity, which is why there will be no let-up in the industry’s commitment to protect honest customers. The chances of getting caught have never been greater, and the consequences, such as a prison sentence and difficulty in getting future insurance and other financial products, have never been more severe and long-lasting.
“Reducing fraud is part of a bigger picture of reducing unnecessary costs, so that honest customers benefit from the most competitive insurance deals. This is why it is important to ensure that the Government implements further proposals aimed at tackling rising personal injury claims, and that there are no further increases to the rate of Insurance Premium Tax.”