Motor Claims and Fraud- The Current UK Market Position
Due to the number of lockdowns in the UK since the start of the Covid-19 pandemic there have been fewer drivers on the roads and much shorter distances travelled by motorists. There was a reported reduction of almost 19% in traffic in 2020 alone.
According to the Association of British Insurers there was a 19% reduction in claims in 2020. There was however a 13% increase in personal injury pay outs to £12,100. There are a number of possible explanations for this. Firstly there have been more pedestrians on the roads as well as an increase in cycling since the pandemic began. Due to the quieter road conditions motorists have been driving faster. A combination of these two factors can lead to more serious incidents taking place.
Another possible explanation is that the pandemic offered fraud rings an opportunity. Other criminal activities may not have been open to fraudsters so they may have turned to motor claims for opportunities to make money.
The quieter roads would mean that staging accidents would not be as risky with fewer witnesses around. It’s more difficult to induce an accident with an innocent party however due to these low traffic numbers.
The Insurance Fraud Bureau estimated that around 170,000 of the 2.7 million motor insurance claims made between October 2019-October 2020 could be linked to fraud and ‘cash for crash’ networks.
There is light at the end of the tunnel with the widely reported Civil Liability Act which came into force on 31.05.2021. One of the aims is to hit whiplash fraud by reducing compensation and making it more difficult for fraudsters to claim. The initial results of these changes will be reported over the coming months once claims data is in.
28th June 2021