Despite all the work done to counter vehicle insurance fraud, cash for crash is one of the fastest growing causes of false claims, according to insurance fraud prevention body Cifas – and fleets must protect themselves. Claims grew by 45% in 2019, costing the insurance industry £340m; and by a further 58,000 cases in 2020.
The Association of British Insurers said in a recent report: “Motor insurance frauds remained the most common, up 6% in number to 58,000 on 2018, albeit their value, at £605 million, fell slightly. Around 75% of fraudulent motor claims contain a personal injury element.”
2021 is not likely to be any better. As we all know, when insurance companies pay out, that cost inevitably ends up on everyone’s premium.
In May 2021 the Whiplash Reform Programme comes into force, which limits compensation and aims to prevent the litigation of such claims. This will undoubtedly make crash for cash less lucrative and less easy for fraudsters – but it is unlikely to remove the problem entirely.
Commercial fleets pick up a disproportionate share of fraudster’s tab, because the CV insurance marketplace isn’t as broad or as fiercely competitive as the consumer sector. Fleet operators are also more likely to be the target of fraudsters wanting big pay-outs, particularly with van fleets operating in urban environments, such as last mile delivery.
SmartDrive Systems’ managed video safety programme has helped many major UK fleets to minimise the impact of fraudulent claims because it provides fast and incontrovertible evidence of what actually happened at the moment of a collision – and in the seconds leading up to it, and after it. Our clients can have the video evidence and associated vehicle data with insurers and police within minutes of the event, shutting down any inappropriate or unjustified claims straight away.
The SmartDrive system combats crash for cash in several ways:
- Rapid deceleration and high definition shocks are typically indicators of collisions or near collisions which cause the cameras to trigger automatically, capturing and offloading via the cellular network to a secure on-line portal, so your evidence is out of the vehicle and protected.
- The footage doesn’t just contain the video. It also captures audio, GPS data, speed, and base telematics data, with regard to forwards, backwards or sideways vehicle movement in graphical form.
- If your driver has suspicions of other vehicles, pedestrians or other road users, he/she can trigger manual event recording, which is also offloaded automatically via the cellular network.
- He/she can also use manual recording after a collision to ensure he captures any subsequent action, and details such as the number of occupants in the other vehicle.
- The instant upload and alert gives rapid first notification of loss (FNOL). Evidence can be with insurers and the police typically before the other party has time to lodge a claim. This cuts credit hire and other costs.
- Most importantly, the instant evidence can exonerate your driver, redirecting the police enquiry and saving the driver and management team prolonged stress and investigation.
- Often the sight of your sticker announcing that your vehicle is protected by a video system – necessary for GDPR purposes – is enough to deter fraudsters altogether.
Of course most fleets find that eliminating fraudulent claims is just one of the most immediate and easiest wins offered by SmartDrive’s video-based safety system. Even more substantial benefits come from using the system to proactively identify risky driver behaviours and eliminate them through an objective, programmatic coaching approach.
For most fleets, insurance prices tend to only go up – however, some of our clients are bucking that trend. They are demonstrating to their insurers that not only can they disprove fraudulent claims, they also have a powerful and effective way of lowering their real risk right across their fleet.
Our eBooks on how to manage fleet insurance costs are a great five minute resource for more information on how you can keep insurance premiums at a minimum and manage fleet risk.
- Posted by Nicola Burgess
- On January 14, 2021