New research by a national personal injury firm has undermined insurance industry claims that a so-called ‘crash for cash’ fraud epidemic is hiking motor premiums
Tom Jones, head of policy at Thompsons, today accused insurers of peddling bogus statistics to lobby for further legal reforms ‘that favour their commercial interests and limit or deny access to justice for accident victims’.
The ‘crash for cash’ phenomenon involves criminal gangs causing crashes with innocent motorists and faking accidents to make fraudulent claims.
In November 2012, a report published by industry-funded watchdog the Insurance Fraud Bureau claimed that one in seven personal injury claims is linked to such scams and that the frauds cost ‘honest policyholders’ nearly £400m a year.
Thompsons alleges that the bureau cannot substantiate these figures and commissioned its own research. This involved eight freedom of information requests to police forces.
The research found that five forces – Scotland, Northern Ireland, Greater Manchester, City of London and Thames Valley – had no data relating to ‘crash for cash’. Two forces, South Wales and West Midlands, failed to reply, while a Metropolitan Police senior officer said he did not know where the IFB ‘got its figures from’.
One force that did provide information, Derbyshire, had undertaken just two investigations into fraudulent traffic accidents in the past three years.
Jones said: ‘The impression given is that there is a “pandemic” of fraud and that’s why premiums are so high, but it appears that simply isn’t the case. Thompsons is concerned that wildly inflated claims made by insurers are being used to undermine the law and damage the justice system.’
Thompsons said its investigation underlines the importance of basing public policy on insurance-related fraud on reliable and independently verified data.
An IFB spokesman said the bureau stood by the figures, which he said are based on analysis of industry data relating to suspected ‘crash for cash’ scams.