Motorists can be slapped with an unlimited fine and risk prison time for carrying out fraudulent car insurance practices.
The warning comes after cases have taken a significant rise in the UK, with more than 45,000 scams recorded this year alone.
In 2023, insurers detected £1.1billion worth of fraudulent claims, marking a four per cent increase from the previous year but now cases are already up 54 per cent.
Insurers identified 45,800 motor scams worth £501million representing more than 50 per cent increase on all fraudulent claims made throughout the year, according to the Association of British Insurers.
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There have been 45,800 motor scams worth £501million
PA
If a driver is found to be guilty of car insurance fraud, they could face an unlimited fine and up to10 years’ imprisonment if taken to court.
Mark Allen, the ABI’s Assistant Director, Head of Fraud and Financial Crime, said: “Insurance is there to protect people and businesses should the worst happen.
“It’s encouraging to see that the industry’s efforts to detect and prevent people from abusing this are working, but there can be no let-up in pursuing insurance fraudsters.
“Fraud doesn’t just impact victims that fall foul of the scammers, it affects everyone that pays for an insurance policy – with bogus claims pushing up the cost of premiums for all. That’s why cracking down on fraud continues to be a top priority for our industry.”
He added: “Consumers also need to remain vigilant to potential scams, and our latest online fraud campaign aims to help everyone to learn how to protect themselves in an increasingly digital world.”
Ursula Jallow, Director at the Insurance Fraud Bureau, stressed the importance of raising awareness about insurance fraud impacts.
She said: “We’re collaborating closely with insurers, law enforcement agencies and industry bodies to ensure that we protect the UK public from insurance fraud and scams.”
Several notable fraud cases highlight the diverse tactics employed by insurance cheats. In one case, a man was convicted for selling over 900 fraudulent motor insurance policies, pocketing £200,000. He received a suspended sentence and community service.
Another case involved a woman who exaggerated injuries from a road traffic collision, attempting to claim £492,141. She was caught out by evidence from The Jeremy Kyle Show and received a suspended sentence.
Detective Chief Inspector Tom Hill from the City of London Police’s Insurance Fraud Enforcement Department stated: “Insurance fraud is not a victimless crime. It increases the cost of premiums for honest customers, while fraudsters who sell fake car insurance or deliberately cause road traffic collisions to claim compensation put innocent motorists at risk.”
Allen advised consumers to stay vigilant, stating: “The golden rule is never act in haste – if a deal appears too good to be true, then it probably is.”
Research revealed that over a third of 18–24-year-olds think it’s acceptable to lie on an insurance application to save money.
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Fraud cases cost insurers and customers over £1billion a year
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The insurance bureau also found evidence that some influencers on social media are encouraging people to lie on car insurance applications to save money.
It comes after reports found that one in five people between the ages of 18 and 24 use social media to search for car insurance deals.
Fraudulent insurance applications cost insurers and their customers over £1billion a year and comes as drivers face insurance costs as much as £3,000.
Consumers are also encouraged to report suspected fraud to the IFB’s CheatLine confidentially.
