Car Insurance Scams

As the recession bites, there have been more and more insurance scams than there were 3 years ago. This is another contributing factor to insurance premium rises. Although some of the scams are very old tricks, they are still used today and with so many ‘no win, no fee’ solicitors it’s easier to make a claim and win.

Below is a list of old and new insurance scams which have been used:

• Claiming for a car that you don’t own – as many people struggle to pay off car loans and go into debt, the finance company can repossess it. There have been many drivers who claim that their vehicle has been stolen rather than repossessed. As car insurance companies do not check the finance companies, the driver gets away with it.
• Setting alight or stealing your own car – this is a very old scam that is still very popular today. You pay someone to steal the car and wreck it or have it set alight. This scam is estimated to account for half of all insurance claims.
• Not declaring or giving false information – we all know that insurers can refuse to pay out if you have not provided all details truthfully but many people still withhold information or even fake their age in order to get lower premiums.
• Panic stop – this is a very dangerous crime that involves the driver of a vehicle to disconnect the brake lights so that when a vehicle crashes into them, they can claim for personal injury. There have also been reports of gangs boarding buses to do the same; only a car is hit and a mass payout can be claimed. This is extremely dangerous but compensation can be better than when just in a car.
• Faking whiplash injuries – whiplash injuries are very hard to detect by health professionals so people who are involved in even the smallest of accidents can fake this injury and get compensation. Nearly a quarter of all insurance claims are for whiplash injuries because they are so easy to fake.
• Entering a lane – you are joining a lane when the driver indicates he will let you in but he doesn’t stop causing a collision. When you point out that he already gave permission, he will deny all knowledge and you will lose your no claims and insurance premiums will rise.
• Swoop and squat – this usually involves three cars, a ‘swoop’ car will be in front and slam on its brakes and you will then also brake causing the car behind to slam into you. The ‘swoop’ car disappears and you can then claim compensation including whiplash whereas the car that shunts you from behind will be liable.

Insurers are now wiser than before and employ a panel of people to monitor the stories people tell to make a claim, so it isn’t that easy to claim now as it was 3 years ago. If you believe you have fallen victim to any of these scams, then tell your insurer who will then investigate.