Cost of insurance fraud (From Gazette)

Cost of insurance fraud

12:54pm Friday 5th June 2009 in

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FRAUDULENT car insurance claims are adding about £40 a year to every premium paid by honest policy holders, it has been revealed.

The cost figure was given by the Insurance Fraud Bureau (IFB) as it published details of the top 20 areas in which crash-for-cash scams are most prevalent.

This type of activity involves fraudsters driving to busy road junctions and then performing dangerous and unexpected emergency stops designed to cause innocent drivers to crash into them.

Claims are then made to the innocent driver’s insurer, often including several accounts of fictitious injuries from members of the criminal gang.

The IFB said Bradford in Yorkshire was the worst place for crash-for-cash scams, followed by Blackburn, Oldham and Liverpool.

The bureau added that, working with the police, it was halting the growth of the problem and that the organised crash-for-cash network sizes have been reduced by 11 per cent over the past two years.

However, although the practice was diminishing in areas such as Luton, east London, Harrow in west London, and in Walsall in the West Midlands, activity was increasing in areas such as Liverpool, Halifax in Yorkshire, and Ilford and Barking in east London.

The IFB said there was growing evidence the proceeds of this type of fraud were being used to fund other forms of serious crime, including drug trafficking and gun running.

Since its formation in 2006, the IFB has been instrumental in helping the police make nearly 300 arrests of people who were trying to defraud motoring insurers.