Rise in fake claims is driving up premiums says insurance giant
A MAJOR insurer detected nearly a quarter of a million pounds worth of bogus claims every day last year.
Aviva saw a 9.5 per cent year-on-year jump in the number of fraudulent claims it declined in 2016.
They included increases in false vehicle injury, household and liability claims.
It declined one in 10 whiplash cases for proven or suspected fraud. The problem is helping to force up premiums, say bosses
Aviva detected more than £85million of insurance scams last year, or around £232,000 worth of bogus claims every day.
The majority of cases it detects are from third parties who are not its customers.
Whiplash remains a major concern, Aviva said.
Bodily injury frauds such as exaggerated or bogus whiplash claims continue to account for the majority of cases.
In all, bodily injury cases account for 59 per cent of the total. The insurer said it is currently investigating more than 16,000 suspect claims of this kind.
Organised fraud accounts for much of the new injury cons that Aviva detects. Last year the company declined claims worth more than £25million linked to criminal rings. The insurer is currently investigating more than 3,000 suspect whiplash claims linked to organised scams.
A growing trend in bogus household claims stems from “serial claimants” – swindlers who make multiple claims, often for the same item, by purchasing dozens of home insurance policies using different aliases.
Policies are taken out with the sole aim of making false claims.
Aviva said that, although these scams are still rare, it now detects more than six of them every month.
The most common fake household claims were for accidental damage, theft and accidental loss.
The average value of a fraudulent household claim was £1,315, with values ranging from as little as £25 up to £83,560.
Aviva said a large number of relatively low-value claims indicates that scammers believe insurers will not scrutinise low-value fraud.
Liability claims, made against an employers’ liability or public liability policy, is also an issue. Aviva has more than 1,000 suspect claims of this nature currently under investigation.
The insurer said as the industry works together to crack down on “crash-for-cash” vehicle collisions staged by criminals, it is believed that fraudsters are moving into new areas and making bogus public and employer liability claims.
Tom Gardiner, head of fraud at Aviva, said: “We vigorously defend our customers against fraudulent claims, even where it is not economic to do so, and will prosecute those people making fake claims wherever possible.
“Looking at our bodily injury fraud data, it is clear that there continues to be an urgent need for fundamental reform of how minor personal injuries are compensated.
“The growing number of these scams is putting pressure on premiums.
“And, in the case of crash-for-cash, innocent motorists are put at risk and scarce public resources are diverted away from real need, such as emergency services, GP and A&E time.
“Whatever the outcome of the General Election, we hope that the incoming government will continue to prioritise these reforms for the benefit of customers.”