A bulletin from Aon UK, notes that Britain’s Insurance Fraud Bureau “has claimed that “crash for cash” schemes, in which car accidents are staged in order to claim on another drivers’ insurance, are at an all time high.”
As a result, Aon has put together a list of tips for rental companies. Rosemarie Spiers, rental business services director of Aon commented: “Rental companies are seen as an easy target in ‘cash for crash’ schemes, predominantly because the hirer has no long-term connection to the vehicle involved, making it more difficult to track the hirer’s history.
“Quite apart from the inconvenience and lost revenue from having a vehicle off the road for repairs, additional claims costs from damage, injuries and credit hire drive up premiums for the entire industry. Insurers have always been vigilant of regional trends impacting claims volume.
“Although rental businesses won’t be discriminated against because of their location, it is likely that an operational scam will result in increased claims scrutiny from insurers, ultimately driving up costs for both fleet owners and drivers, often in areas that can least afford it. Typically, the average cost of a claim in one of these scams is at least five times the standard claim value.
“The time and cost involved in defending ‘cash for crash’ schemes for rental car businesses can be considerable, however following Aon’s top tips, and working with their insurance broker and underwriters to implement a risk management strategy can help to manage insurance premium costs.”
Here are Aon’s “Top 10 tips to protect against fraudulent claims.
1. Know your own area – get to understand your typical customer. Any major deviation from this should prepare you to be additionally rigorous in your pre-rental enquiries.
2. Count the key fraud indicators – is the hirer from outside your normal catchment, only requesting a one-day hire, paying cash? Combinations such as these should raise concerns.
3. Experience – develop training plans for your staff and ideally never leave an inexperienced member of your front-of-house team to complete bookings.
4. Work with your customers – most are likely to be legitimate individuals, who fall victim to a crash scam. Make sure they are aware of what to do in the event of an accident they suspect of being a scam before hiring, information gathered at the scene can often be critical to protecting your business.
5. Watch for efficiency – cash-for-crash scams are business ventures that need quick turnaround on claims payments. An overly helpful hirer who shows familiarity with the information you’ll need when reporting an incident may just be well practiced.
6. Count the key fraud indicators – where and when did the crash take place, and does this match the hirers intended use. A hirer who knows other party in too much detail should also raise your suspicions.
7. Build real evidence to defend the claim – gathering all details quickly and thoroughly, including photographic evidence. Check that vehicle damage correlates with the driver’s version of events.
8. Collaborate with your insurer – your insurer is as keen as you to eradicate fraudulent claims. By working closely with insurers to gather factual information on your claim, you can improve the final resolution.
9. Cooperate with specialist investigators – in complex or high value cases your insurer may appoint a specialist investigator who can assist in checking an individual’s details such as cross-checking their credit histories.
10. Check RISC database – developed specifically for the rental industry, the British Vehicle Rental and Leasing Association’s RISC database contains the names of over 6,000 individuals and companies who have caused problems for members of the industry body.
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