The rise of ‘crash for cash’ scams has been a growing problem over the past few years.
Criminals orchestrating accidents, in order to fraudulently claim, cost the car insurance industry £336 million each year, according to the Insurance Fraud Bureau.
Fortunately, telematics technology has emerged as a key way in which insurers have been able to detect and prevent this type of insurance fraud.
Coverbox, a leading provider of blackbox insurance, recently revealed a case study in which an insurer saved £30,000 – £40,000 through the use of blackbox data analysis. The ‘crash for cash’ scam was uncovered using blackbox data that proved that two individuals had chosen to stage an accident in order to receive an insurance pay out.
The devices used by Coverbox not only collect driver data but also generate a detailed report in the event of an incident. This data can then identify trends that may point insurers to suspect or fraudulent claims.
In this case, suspicions arose when upon analysis, it was proved that one of the claimants had links to an established fraud network and even worse – the data from their blackbox indicated that the two claimants had visited each other’s addresses previously, proving that they knew each other before the incident.
The data went on to show that the vehicles involved in the collision did not actually collide with each other in the manner alleged. It quickly became evident that this was yet another case of attempted insurance fraud.
The insurer opted to challenge the claims made by the fraudsters, and as they failed to turn up to their court hearings, the court settled the judgement in the insurers favour.
The blackbox data used to identify these trends was key to the insurer catching these fraudsters, avoiding a large settlement and saving the insurer in the region of £30,000 – £40,000.
Howard Collinge, director at Coverbox, commented, “Unfortunately this is not an isolated nor unusual case as ‘crash for cash’ scams have been a widespread problem for a long time. We endeavour to identify and prevent such instances of fraud, as they lead to higher premiums for honest customers and large losses to insurers. Our aim is to make car insurance fairer and cheaper for everyone involved”.
Howard Collinge - director, Coverbox