Keeping your vehicles on the road and controlling cost is a vital part of running a business.
Whether you run a logistics operation or a fleet of cars for your sales force, if your vehicles are off the road, it can seriously impact your bottom line.
A significant and growing problem across the UK is motor insurance fraud, and you must educate your drivers and take steps to minimise the risk to your business as well as potential increases to your Motor Fleet Insurance.
What Is Cash-For-Crash Insurance Fraud?
Motor Insurance fraud is a highly sophisticated scam usually operated by groups of gangs.
Their aim is to create an accident whereby they can deem that your driver is at fault and make inflated claims for damage and injury which can run into tens of thousands of pounds.
Here are some of the typical examples:
- Your driver/vehicle is proceeding along a road when the car in front slams on its brakes for no reason and your vehicle hits the fraudster's vehicle. All 5 passengers claim to have suffered an injury and that you are to blame.
- The fraudster disconnects the brake lights on their vehicle, causing a hit in rear claim as above.
- The car in front is approaching a clear crossing, they do not slow down, but slam on the brakes right on top of the crossing causing you to hit their vehicle – their accident report will highlight that they had seen a "pedestrian" approaching the crossing.
The issue from an insurance perspective is that a hit-in-rear claim is tough to defend and responsibility is usually attributed to the following vehicle on the basis that your driver was travelling too close and should have been able to stop – very frustrating, but without any other evidence or proof of the fraud, it is difficult to stop.
What About Flash-For-Cash?
Flash-for-cash is a new derivative of cash-for-crash whereby the fraudster will flash their lights to let you proceed (or so you thought!), they then speed up and drive into your vehicle claiming that you pulled out in front of him.
While flashing has become a common courtesy on our roads, it has no official place in the highway code, the fraudster will obviously deny that they did flash and even produce witnesses to confirm their story!
How Big Is The Problem?
According to the Insurance Fraud Bureau, insurance fraud is currently running at £392m per annum and adding circa £50 per year to the average motor policy.
A record number of 6060 frauds were reported in 2013, representing a 32% increase. While, in one way, this highlights the extent of the problem, Ben Fletcher, Director of the IFB can at least see some positives, "It is fantastic to see such an increase in fraud reports, and it shows that the public shares our contempt for insurance fraud.
Far from being a victimless crime, insurance fraud hits honest policyholders in the pocket and, in some cases, puts innocent road users in harm's way".
What Can I Do As A Fleet Manager Or Business Owner?
Whether you run two, or two thousand vehicles, it is just as important to raise awareness and take some steps to reduce your fraud exposure.
- Driver Training & Education – As a specialist fleet insurance broker, we recommend regular driving training which should include fraud awareness. If your budget cannot run to professional training, why not run an awareness session at team meetings?
- Driver Packs – If your vehicles don't already include driver pack, take some time to create one. This should include full details of the procedure for vehicle breakdown and accidents. The pack should include:
- A throwaway camera
- Handout including your own insurance details
- Information form highlighting the information the driver should write down and suggested photographs (position of the vehicles, damage to vehicles, etc.). All of this information could prove invaluable in reducing a claim cost or defending a fraudulent claim.
- Vehicle Cameras – Cameras not only provide real evidence to help against fraud but have also proven to reduce accident ratios through enhanced driver awareness. The cost of front-facing vehicle cameras is becoming much more affordable and specialist motor fleet brokers, such as Insync Insurance, can offer discounts and/or a contribution from fleet insurers towards the cost. On many occasions, they will pay for themselves over a two to three year period from the insurance saving alone, not to mention the additional saving from increased overall vehicle availability.
- Telematics – Telematics involves the fitting of a small GPS device in each vehicle to monitor the location, speed and behaviour of your vehicle fleet. Research from the King's Fund indicates that at least 30,000 whiplash claims per year are fraudulent and fitment of telematics technology can provide data on the direction, velocity and G-Force of a vehicle impact making it much more difficult to falsify a claim. Telematics also delivers a host of additional benefits, including significant fuel savings.
Sadly implementing all of these measures won't stop the fraudsters as they'll likely move on to other potential victims, however, it will significantly reduce the risk for your business.
FREE Motor Fleet Insurance Review
The Insync team will take the time to really understand your risk as well as the background to any claims to ensure that the risk is rated correctly and you receive the right cover at the right price!
You can book a Free Review of one of our expert insurance gurus at a time that suits YOUR diary directly from our website. Alternatively, please call us on 0330 1240730, we would love to hear from you.