The number of pre-meditated, phoney road accidents carried out by gangs has hit record highs, as gangs rally in their numbers to bleed as much money from insurers through false whiplash claims.
This is the perspective of Aviva, who assert in their latest report that organised gangs dealing in fraudulent activity has escalated by 21% on 2013, and itís honest motorists who are paying the price, as premiums have been increased by a gross £400m over the last year.
Aviva called for the era of whiplash payments to be brought to an end, as this appears to be the only sure-fire way of stopping organised gangs exploiting the lax terms of these to their benefit, and both insurersí and the wider publicís detriment.
These whiplash claims form the lionís share of motor insurance fraud are instances of contrived crashes whereby 2 fraudulent motorists brake sharply in front of an unsuspecting vehicle prompting the innocent driver to crash into their rear. This works as the vehicle that is behind in a crash is naturally considered to be at fault in the eyes of the insurer, and the duplicitous driver in front seeks to profit from the sizeable sums of compensation on offer via a false whiplash claim.
The organised nature of such claims is evolving, implies Aviva, as these gangs use increasingly calculated methods to identify suitable targets, e.g. senior citizens, and the insurer warns the situation is only worsening as over 50% of its identified motor insurance fraud is conducted by organised gangs.
ìCrash for cash is not just a financial problem ñ itís a serious social problem. No other form of insurance fraud puts the public at risk of serious injury,î said Tom Gardiner, head of claims fraud for Avivaís UK and Ireland general insurance business.
ìLast year Aviva found these accidents increased by 51%, and they are continuing to grow. Part of the growth is coming as fraudsters are moving away from a small number of hot spot locations to a much wider footprint.î
Aviva noted that the prime areas for organised car insurance fraud are Birmingham, Luton, North London and Manchester. Although the North of England has yielded disproportionately higher levels of these ëcrash for cashí claims, they have proliferated and are now increasingly common in London and its surrounding areas.
Despite heightened understanding amongst the public throughout 2014 over the gravity of exponentially growing cases of car insurance fraud, the problem has only worsened.
A suggestion to policymakers put forward by Aviva entails the replacement of financial compensation for those making whiplash claims with rehabilitation, inferring that this would close the door on conniving car fraudsters seeking for a quick payday whilst keeping honest driversí premiums low.
Government announced its intention to slash medical charges for UK whiplash claimants from £700 to £180, whilst also making it mandatory for claimants to produce genuine medical authentication legitimising their whiplash claim. This second measure could prove pivotal in the eradication of false whiplash claims, given how hard the injury is to disprove.
Tom Gardiner continued: 'The fight against fraud begins with an effective deterrent. In addition to more prosecutions and stronger sentences, we need to remove the financial incentive for minor whiplash claims like those claimed for by serial crash for cash fraudsters.
'We are asking the Government to consider compensating short-term whiplash with rehabilitation, instead of cash. Would crash for cash exist if there was no money in it? We don't think so.'
The issue has escalated from just one of financial loss to one of security for the wider public ñ an extra £14 on premiums is undoubtedly overshadowed by the possibility of one of these staged crashes going wrong and an innocent driver ending up seriously hurt ñ Policymakers must act swiftly and decisively.
Save money on your car insurance by comparing quotes with MoneyExpert and earn £25 cashback when you take out a policy.