Insurance fraud

Insurance fraud

More about insurance scams like 'crash for cash' and 'ghost brokers'

Insurance fraud

Insurance fraud is when someone invents or exaggerates a claim, or doesn't tell the truth in order to receive a benefit or advantage that they are not entitled to or to get cheaper insurance cover.

Different types of insurance fraud

Induced motor incidents

This is also known as 'crash for cash' and is estimated to cost the UK insurance market over £1 billion annually [1]. It's where a fraudster brakes very hard for no reason, making it almost impossible for the driver behind to avoid crashing into the back of them.

A claim is then made against the innocent motorist, e.g: for compensation for false or exaggerated injuries to people allegedly sat in the criminal's car during the accident. 

What to do if involved in an accident

  • Tell us as soon as possible if you're suspicious about the accident.
  • Make sure you get the full contact details for the other driver (known as the third party) including their land line telephone number and insurance details.
  • Write down the vehicle make, model and registration number.
  • Accurately record the damage caused by the accident to all of the vehicles involved and any other damage to the vehicles that was already there before the accident.
  • Get the names of any passengers in the vehicle. If possible make a note of what they look like, where they were sitting when the incident happened and any injuries they appear to have.
  • Get the names and addresses of any independent witnesses.
  • Take photographs or a video of the scene of the accident if it's safe to do so.
  • Observe the driver and passengers' behaviour, for example are they overly friendly, aggressive or impatient?
  • Observe how the driver deals with you. Did they read from a document or hand you a document with their details already recorded on. Keep safe any documents handed to you as these may assist the investigation of the claim.
  • Note if there was anything suspicious about the accident, for example did the driver brake suddenly for no apparent reason?


Illegal Insurance Intermediaries or 'Ghost Brokers'

At LV= we sell some of our insurance policies through brokers and intermediaries but we only deal with authorised firms. Unfortunately, fraudsters sometimes target the places where you look for a quote online. When searching for a good deal on your insurance, be aware that if it seems too good to be true then it probably is.

An illegal intermediary may claim to be a legitimate broker, work for an insurer, or know someone in the business. They'll often claim to offer discounts you can't get anywhere else but the quotes and insurance they arrange aren't based on your true personal details or circumstances, and cover is often paid for using a stolen credit card or false bank details. This can mean that your insurance isn't valid so your car could be seized by the police.

What to do to avoid buying fraudulent cover

Contact us directly or use a legitimate insurer, or broker.
Check the company you're dealing with is authorised by the Financial Conduct Authority by entering their name on the Financial Services Register.


False No Claims Bonus (Discount) certificates

Proof of NCB or NCD is usually a letter or certificate from your previous insurers, or your renewal invite. It'll show the number of years in which you have not made a claim and they won't charge you for supplying it. However, there are firms operating on line who offer to produce false No Claims Bonus (Discount) certificates for a fee.

Providing fraudulent documents to your insurer can invalidate your insurance and affect any future policies you buy. If you're approached by anyone attempting to sell you a falsified document or you know of any website offering this, please call us on 0800 633 5420 or email [email protected]


Policy and claims fronting

Fronting is illegal - it could invalidate your insurance and your claim being rejected whilst it may result in you or the main driver in court. Fronting occurs when a driver claims they're the main driver even though they are not to reduce insurance costs.

E.g: A mum and a dad have a car each, but they buy their newly qualified daughter a car, but take out the policy in one of their name as it's cheaper. If the daughter uses the vehicle regularly (to and from work, college etc) and is the main driver but this is not declared then this is a fronted policy.

How to avoid becoming a victim of financial crime

While financial crimes comes in many different forms, it's important to protect yourself as best you can. To make sure you don't get caught out, you need to be prepared to spot the signs of fraud and cyber-crime to keep you and your money safe.

Cyber aware

Being a victim of a cyber-attack has many implications, so staying secure online is essential to protecting your personal identity and finances.


Do you suspect fraud?

If you're worried that you may be suspecting fraud, and you have an LV= policy, contact us on the number below. Or alternatively, you can email us.

If you don't have an LV= policy, you can report your financial crime suspicions to Cheat Line on: 0800 633 5760.