Car insurance fraud

In 2014, car insurance fraud resulted in £1.3 billion worth of fraudulent claims. That annual total, almost a fifth higher than in 2012, amounts to an average of £3.5 million  every day. It could be committed by a vehicle’s owner who gives false information when taking out a car insurance policy in order to lower their premiums, by a third party who sets up an accident in order to make money via an insurance claim, by a mechanic who inflates the cost of repairs to a vehicle involved in an accident or by criminals pretending to be honest insurance advisers but who actually sell fake or doctored policies.

What is insurance fraud?

There are many different types of insurance fraud. Here is a brief outline of some of the fraudulent acts that are most common.

Crash scams

‘Flash for cash’ is when a driver flashes their lights to signal to other drivers they are safe to pull out at a junction, then crashing into them. 'Crash for cash' scam includes slamming on the brakes without warning and for no reason, forcing a rear end collision by the driver behind. Some criminals have even been known to remove their brake light bulbs, so the unwary driver behind has less chance to stop.


Fronting occurs when a driver declares to a car insurance company that they are the main driver of a vehicle but it is actually someone else. Usually, an older, more experienced driver falsely insures a vehicle in their own name, even though the main driver is a younger, riskier motorist. As such, fronting is often committed by parents with the aim of getting a cheaper insurance quote.

Vehicle dumping

This occurs when a car’s owner disposes of it by leaving it somewhere, burning it, dumping it in a large body of water, or even selling it, and then claiming it was stolen.

Ghost brokers

It isn’t just drivers that are guilty of committing insurance fraud; there are also criminals posing as legitimate insurance brokers selling falsified or even completely fake insurance policies. These are known as ghost brokers. They sometimes buy insurance packages from genuine companies using fabricated information, modify it, and then pass it on to customers. Alternatively, the criminals can create fake documents that look legitimate and offer those to customers.

How to avoid car insurance fraud

To ensure your car insurance is valid and correct, be sure to tell your insurer about:

  • Any changes to your circumstances, such as address
  • Detail changes of other people on the policy
  • Changes in your mileage
  • Minor knocks, as well as more serious accidents, even if you don’t intend to claim
  • Other incidents, such as fire, theft or water damage
  • Penalty points gained on your licence or any motor-related convictions – do it immediately, not at renewal
  • Changes of career or job title, as this information is used to calculate premiums.

If you ever think you’ve been involved in a crash scam, make sure you speak to your insurance provider immediately, and only ever buy policies from authorised insurers.

Find further information here on car insurance or speak to one of our RAC advisers on 0330 159 1019* to get a quote.

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RAC Insurance is a trading name of RAC Financial Services Limited. Registered in England and Wales No. 5171817. Registered office: RAC House, Brockhurst Crescent, Walsall, WS5 4AW. RAC Car Insurance and RAC Home Insurance are arranged and administered by BISL Limited, which is an independent intermediary. Registered in England no. 3231094. Registered office: Pegasus House, Bakewell Road, Orton Southgate, Peterborough PE2 6YS. Both companies are authorised and regulated by the Financial Conduct Authority.