Four shocking insurance scams

With insurance fraud costing us all £50 a year, we reveal four of the most egregious cases uncovered by investigators.

Each week, insurance companies uncover a massive 2,670 cases of fraud worth £19 million, according to the Association of British Insurers (ABI).

On an individual level, bogus insurance claims add £50 to the average policyholder’s annual insurance bill.

False home insurance claims are the most common type of fraud with 71,000 cases uncovered during 2011. Conversely, car insurance fraud is the most costly and the insurance industry saved £541 million in 2011 by exposing 45,000 illegitimate claims.

While insurance fraud may be alarmingly common, some cases are more shocking than others. Here are four of the more extreme cases published alongside the ABI’s research.

CASE ONE: The weakest necks in Europe

It’s not difficult to believe that one person could be liberal with the truth ­– or even two or three, but this case of fraud involved a group of 30 men.

Alleging they were on the way to a greyhound racing meeting, the fraudsters hired a coach as transport.

During the journey, they staged an accident involving the car behind and later all claimed to be afflicted with whiplash – though the driver didn’t feel the impact at all.

Upon investigation, it became apparent that the group hadn’t booked any tickets for the supposed outing and four men were arrested on suspicion of conspiracy to commit fraud.

According to the ABI, whiplash is the largest factor accounting for the rising cost of car insurance claims. In fact, the high incidence of such claims has given rise to an industry joke that Brits have the weakest necks in Europe.

CASE TWO: The most unlucky family in the UK?

While we all have spells of misfortune, one family tested the boundaries of credibility by putting in more than 100 claims for damage to their home.

The majority of these claims involved alleged storm damage to roofs and damage to walls caused by untraceable vehicles.

Upon discovery of the fraud, the culpable family members each received 15 months in prison.

CASE THREE: The £3.2 million scam

If you thought the coach scam involving 30 people was a large, coordinated scheme, this case uncovered by Bedfordshire Police and the Insurance Fraud Bureau is even more shocking.

The investigation exposed a staged accident gang that it is believed was involved in 180 ‘crash for cash’ accidents, which were associated with 230 insurance claims, worth £3.2 million.

As a result of the investigation, 37 people were sent to prison.

CASE FOUR: Photo forgery

After cutting his thumb during a trip to the gym, one man attempted to put in a claim for a more serious injury. His proof? He attempted to substantiate his claim with a photograph he had downloaded from the internet.

Perhaps he didn’t realise that insurers are likely to require something a little more concrete before paying out.

Crackdown on fraudsters

To accompany the research, the ABI has also announced the launch of the Insurance Fraud Register, which will contain profiles of people who have made illegitimate claims.

Otto Thoresen, ABI's Director General, said: ‘The industry makes no apologies for its zero tolerance approach to insurance fraud. Honest customers are sick of footing the bill for insurance cheats, through higher insurance premiums.

‘The development of the Insurance Fraud Register […] reinforces the strong message that insurance cheats can expect difficulties in obtaining future insurance, credit and other financial products, as well as getting a criminal record.’

**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**

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