Insurance scams have been around as long as insurance companies. However, rather than individuals committing the fraud, dedicated gangs are now involved. Insurance fraud gangs are now costing insurance companies 4 million a week.

The fraud involves two gang member vehicles, and an innocents vehicles. The first car would place itself in front of the victims car, while the second would accelerate past both vehicles.

The second vehicle will then deliberately pull in front of the first gang car, causing it to break sharply. The vehicle belonging to the innocent driver would crash into the first gang members car. The accident is therefore caused by the victim, as the last car to hit is usually at fault in a pile up.

The gang will not only claim the cost of the vehicle, but also the more lucrative personal injury claim. The innocent driver will then be out of pocket as the next policy renewal will cost more, plus suffer from the hassle of repairing their vehicle.

In addition, since these scams are becoming more common, the costs of paying for these fraudulent claims by the insurance companies has an effect of increasing the premiums for all users, as it is costing the insurance companies £200 million a year.

To help counter the frauds, the association of British insurers have set up a special unit called the insurance fraud bureau, as it is costing the insurance companies 200 million a year. Time will tell how effective this bureau will be, in the meantime it is important to report any suspicious accidents to your insurer.