Top Fraud Detection Tips for UK Insurance Holders

Car insurance fraud is a one of the most costly white collar criminal acts in the U.K. The consequences of insurance fraud drives up the costs of insurance premiums for everyone because insurance premiums must make up for lost revenue due to fraud. The following UK insurance fraud detection tips can assist the public.

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When it comes to an insurance agent, representative or impostor he or she may produce or circulate fake insurance identification cards, certificates, and policies. Besides false documents, false statements are additional elements of fraud. The party may misrepresent their license to the public or the applicant's qualifications for special coverage. An agent, impostor or representative may keep the premium for personal use and issue a fake policy or no policy to the premium payer.

It is illegal to sell unauthorized insurance. Policies sold in the UK must also meet with approval of the Financial Services Authority (FSA). Unauthorized insurance premiums may appear to be very inexpensive. Inexpensive policies may be purposefully designed as to bait unsuspecting parties for fraud. Cheap fraud baiting policies have rates too low to legitimately provide standard coverage sufficient to cover claims or payout entitlement expectations of unsuspecting policyholders.

For others outside the insurance company or their impostors, fraud by arson is when someone torches a vehicle or hires someone to do so in order to profit from an insurance claim. Disaster fraud occurs when someone misrepresents that a claim is valid or over exaggerates losses incurred. For example, vehicles may be falsely reported as damaged in a flood, or over exaggerate loss or damage repair.

Claims related fraud includes creating a fraudulent claim or exaggerating a claim. A party may stage a vehicle accident, or claim auto damage occurred in an accident when it did not. C laming car theft or vandalism that did not occur or was arranged is also fraudulent. Exaggerated claims may involve falsely claiming injuries to body or car body as resulting from an auto incident. It may also include exaggerations in auto or medical care costs. Medical fraud includes claiming services were provided that were not, or inflated medical billing.

Driving related fraud includes drive down, hit and run, sideswipe, swoop and squat scams. In a drive down scam, a driver invites another driver ahead of him or her in line of cars by waving them forward. However, once the driver accepts the invitation and begins to enter the line, the scammer accomplice drives forward to crash into the car. In a hit and run, perpetrators use a pre-damaged car and contact authorities to report a hit and run, often calling the police to report the phony incident.

Sideswipe tactics involve a driver deliberately swerving into another lane to force a collision. When vehicles are involved in a swoop and squat, two fraudster cars are involved, one which will bypass the targeted driver and another accomplice already driving in front of the driver. When the bypassing car passes the target, its destination is ahead of the leading accomplice car. The bypassing car swoops into its destination location which forces the accomplice to slam on the brakes, or "squat". This causes the target vehicle to rear end squatter. The vehicle that caused the accident flees the scene. The squat car will file insurance to claim damage to the vehicle and personal injury.

UK insurance can protect policyholders, but policyholders can become more aware of the fraud scams that cause immediate risk and increased premiums. Report suspicions of a scam to policy representatives. The Financial Ombudsman Service and the Insurance Fraud Bureau (insurancebureau.org) provide public services.