Call for crackdown on car crash fraud

Published on 10/03/2011 13:49

A CRACKDOWN on fraudulent injury claims which have caused motor insurance premiums to soar is demanded by MPs today.

They called for a dedicated police unit to tackle false claims such as from "staged accidents", where vehicles are deliberately "crashed for cash" in an attempt to gain insurance pay-outs.

The Automobile Association, which gave evidence to the House of Commons' transport committee's inquiry into the issue, said average premiums had increased by one third last year - the biggest leap for at least 16 years.

The UK's biggest motoring group also said the cost of insurance for drivers under 23, which rocketed by 58 per cent last year, was "becoming unsustainable".

Committee chairman Louise Ellman said: "Wider access to justice is to be welcomed, but it has come at a significant cost, with far more personal injury claims being made than in the past.

"The police made plain to the committee that staged accidents are on the increase and that, so far, we have been lucky there have been no fatalities resulting from such incidents.

"That luck may run out unless the insurance industry acts rapidly to help the police target this kind of insurance fraud."

The committee also urged ministers to implement a promised tougher driving test in an effort to cut high casualty rates among young drivers.

However, insurers accused the committee of not properly understanding the problem.

Nick Starling, director of general insurance and health at the Association of British Insurers, said: "The committee has failed to recognise the main cause of the recent increases in motor insurance premiums is ever- increasing personal injury claims and spiralling legal costs. These are often driven by claims management firms.

"The committee should have called on the government to implement in full the recommendations of Lord Justice Jackson's report into tackling the compensation culture. This will not only control excessive legal costs, but will speed up the payment of compensation to genuine claimants.

"Legal costs alone now add an extra 40 a year to the average motor premium. Motorists should not have to foot the bill for our cost-ridden compensation system."

The AA supported the idea of a special police unit. Its insurance director, Simon Douglas, said: "With insurer control, such a unit could very quickly pay for itself. Fraud, particularly false personal injury claims, is the biggest driver of premium increases.

"At present, it is difficult for the police to commit time and effort to investigating fraudulent claims. A dedicated unit will also make the work of the (insurance industry's] Insurance Fraud Bureau much more effective.

"At a time when the cost of motoring is soaring, passing the 6 per gallon mark, drivers are looking to the insurance industry to work with the government to control spiralling claims costs that ultimately fuel inflation."For many, especially the young, the cost of insurance is simply becoming unsustainable."