Sunday, November 15, 2009

Living with your car: Avoiding bogus collisions and insurance fraud

Living with your car: Avoiding bogus collisions and insurance fraud

A new Police unit is being set up specifically to target criminal gangs that instigate deliberate car crashes to cash in on fraudulent insurance claims. Innocent motorists are targeted by the gangs, with a low-speed collision initiated so that thousands of pounds can be claimed.

It's estimated that staged accidents are costing £350m per year, because it's not only organised gangs doing it - single drivers looking to make a quick profit from a claim are at it too. It adds around £40 to an average premium, so police officers are being trained by the Metropolitan force to attend the scene of any suspect accidents to eradicate the problem. But it won't stop overnight.

Of course, with unscrupulous drivers around, nobody can be certain of staying out of harm's way - but the more you know, the safer you are. Read on to find out about the scams and how best to protect yourself.

Accident types:

There are two types of staged accidents: those involving an innocent victim (sometimes known as an 'induced accident'), and those where the two drivers are in cahoots. Obviously you needn't worry about the latter too much, but the former accounts for the majority of bogus insurance claims.

How does it work?

Induced accidents were brought into focus recently when 24-year-old Mohammed Patel was convicted of a £12m 'crash for cash' scam involving hundreds of innocent motorists at the same roundabout in Cheadle, Manchester. His technique was common: he'd target elderly drivers, usually, because they're generally more vulnerable, position his car in front of them then slam the brakes on so they'd shunt his car. It worked because he'd disconnected his brake lights so the driver didn't notice until it was too late. Technically, the accident is the victim's fault because the driver of the rear car is usually responsible in a rear end collision.

How can it be avoided?

Usually the fraudster will drive slowly to avoid whiplash, but all you can really do is be sure to leave a big gap between you and the car in front. Watch out for cars that slow down noticeably without the brake lights coming on too.

'Witnesses' from the gang will usually be on hand to verify what happened, so have your wits about you for those that seem over-familiar with the other driver, or seem keen to side with them. As with any accident, though, you should make sure you exchange details with the other driver, and have them write down their version of events. You should do the same too, including every detail about the car, the driver, the witnesses and the circumstances.

Most importantly, tell your insurance company if you think you've been a victim of a scam.

Telltale signs:

As is often the case, certain locales are worse than others. Busy roundabouts are usually the place where staged accidents occur because traffic queues are slow moving and unpredictable.

If the car you've shunted seems to have followed you or you've seen it a few times already - on the roundabout, say - then you might have been a victim.

After the event, has the claimant made excessive injury or damage claims? That's why it's important to note every single detail at the time. Often, extra passengers will be claimed for that weren't there, so be aware of that too.

Some facts:

Gang members who stage accidents often do so multiple times at familiar spots, so if you've seen one or more rear end shunts in a particular place, be aware that it could be a fraud 'hotspot'.

Research shows that men are more than twice as likely to stage an accident, and those in their twenties are the most frequent offenders - with three percent admitting they've made a fraudulent claim.

London is the worst area for staged accidents, with six percent admitting they've either claimed fraudulently or considered doing so. That's three times the number in Wales.

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