'Cash for crash' fraud costs drivers £90 a year

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An increase in the number of fraudulent car insurance claims is estimated to be adding £90 to every driver's premium, new figures have revealed.

According to a report by the Association of British Insurers, almost half of the 118,500 bogus or exaggerated insurance claims uncovered last year were motoring claims, and the number of staged accidents and false whiplash claims has risen by 18 per cent.

This 'cash for crash' fraud is thought to have cost the car insurance industry a record £1.3 billion last year, and it is pushing firms to bump up every driver's premium as a result.

A common technique amongst fraudsters involves a driver suddenly braking hard at a junction, causing the motorist behind to crash into the vehicle. Insurers must then pick up the bill for the whiplash claims of those in the first car, while the driver behind also claims for repairs.

Furthermore, insurance chiefs suggest lawyers are encouraging those involved in an accident to submit inflated claims.

The ABI report concluded: "Fraudulent motor insurance claims were the most expensive and common, with the number of dishonest claims at 59,900 - up 35 per cent on 2012 - and their value at £811 million, up 32 per cent."

In total, whiplash claims are now costing the industry more than £2.2 billion a year, accounting for eight out of ten personal injury claims, causing some experts have labelled Britain the 'whiplash capital of Europe'.

Have you fallen victim to 'cash for crash' fraudsters? Leave your comments below...