“Crash for cash” car accident claim scams rose by 51% last year, according to Aviva, one of the UK’s biggest motor insurers. Aviva insure 10% of all cars in the UK .These faked accidents led to around 5000 fraudulent car accident claims for personal injury, according to Aviva.Aviva is investigating 5,500 suspicious injury claims.
It is calling for harsher sentences for the fraudsters, who often do not get prison sentences, despite the large sums involved. The most common punishment for faked car accident claims is a community order. Typically, the accidents are caused deliberately by gangs who put in car accident claims for whiplash compensation. Aviva says that the number of false car accident claims is likely to be much higher than those its fraud team has discovered. The cost of the fraudulent accident claims is borne by honest motor insurance customers through increased premiums.
Car Accident Insurance Claims: Plans for cap on courtesy car costs
The cost of courtesy cars should be capped to push down car insurance premiums, the competition regulator has proposed. Replacement vehicles cost consumers as much as £180m a year through higher premiums, the Competition and Markets Authority (CMA) said.
There will also be a ban on website deals which stop insurers offering lower product prices elsewhere. The investigation is separate from that looking into exaggerated car accident whiplash claims and insurance fraud.
To further reduce the number of frivolous car accident injury claims, the Ministry of Justice said lawyers would be banned from offering cash incentives to persuade people to bring personal injury claims.
Crackdown on bogus car accident claims
The culture of “ambulance-chasing” lawyers and bogus car accident whiplash claims could come to an end following new measures set out by the Government to crack down on fraudulent accident claims.
Lawyers will be banned from offering accident victims incentives to encourage them to make a claim and courts will be given powers to throw out compensation actions where claimants have been dishonest. The reforms by the Ministry of Justice (MoJ) aim to tackle the rise of the compensation culture and reduce the amount being paid out unnecessarily by insurance companies .
The price of average motor insurance fell by more than £100 over the last year, according to the AA.Despite this, 59,9000 dishonest claims – a rise of 34% – cost insurers £811 million in 2013, the Association of British Insurers (ABI) said.