give one example of a case of fraudulent practices committed by people with insurance companies
Answers
1. Stolen Cars
Motor insurance fraud is estimated to cost the UK insurance industry over £1 billion annually. Often, these claims are opportunistic and involve little to no planning. However, there are also numerous cases where criminal gangs commit elaborate acts of fraud following months of planning and organisation.
One of the most common types of insurance scams involves stolen cars. This is becoming more prevalent and lucrative particularly with the increase in the numbers of people taking out “new for old” insurance policies. Fraudsters often buy a new vehicle, drive it around for a couple of years, dispose of it and then make a claim on the insurance and effectively enjoy free motoring by receiving a brand new vehicle or cash equivalent.
Advances in vehicle security means that the alleged theft of the vehicle is becoming more difficult to explain to insurers as most vehicles nowadays cannot only be stolen with keys but the methods and explanations used by criminals are becoming far more sophisticated.
Disposal of the car can also lead to further financial gain as in some cases, scammers will sell it onto a criminal body shop to be broken into parts before claiming to their insurer that the car was stolen. Another method involves getting a friend to ‘steal’ the car and before abandoning it, deliberately crashing it and ensuring that the damage is such that it would not be economically viable to repair.
Perhaps the most elaborate type of stolen car fraud involves selling the car to an overseas buyer without any paperwork before reporting it stolen once it’s been shipped overseas.
Answer:
Stolen Cars
Motor insurance fraudulent