Published: 14 November 2025
FOR INTERMEDIARIES ONLY
Cash for crash: unmasking the tricks behind exaggerated claims
'Cash for crash' schemes are becoming more common in the insurance world. These involve exaggerated claims after planned accidents, creating problems for insurers, brokers, and customers. Knowing how these schemes work and communicating clearly with your customers can help reduce their impact.
What are cash for crash schemes?
These schemes involve setting up accidents to make exaggerated insurance claims. Fraudsters might fake accidents or make real ones seem worse to get more money. This can lead to higher insurance costs and trouble for innocent people involved.
Common tricks used in cash for crash schemes
- Staged accidents: fraudsters cause accidents on purpose, often targeting unsuspecting drivers, to claim more for vehicle damage and injuries.
- Phantom passengers: claims may include injuries to people who weren't in the car, increasing the payout.
- Exaggerated injuries: fraudsters might claim their injuries are worse than they are to get more money for medical expenses.
Why do these schemes happen?
Mainly to make money. Fraudsters take advantage of the insurance system to get payouts that are bigger than the actual damages. This affects insurers financially and can lead to higher premiums for honest customers.
How to protect against 'cash for crash' schemes
Helping customers understand and be aware of these schemes is key:
- Educate customers: share clear information about the risks of exaggerated claims and how these schemes work. Awareness is the first step in prevention.
- Encourage reporting: urge customers to report any suspicious accidents or activities. Quick reporting can help insurers investigate and take action.
- Use technology: employ tools like telematics and dashcams to collect accurate accident data. This can help verify claims and deter fraudsters.
- Team up with local authorities: work with police and industry groups to share information and tackle fraud together.
Responding to 'cash for crash' schemes
Acting quickly and effectively can lessen the impact of these schemes:
- Investigate thoroughly: insurers have a duty to carefully check claims that seem suspicious, using all available resources to confirm the accident and injuries are real.
- Improve fraud detection: use advanced systems to spot patterns and oddities in claims data, helping to identify possible fraud.
- Train your staff: make sure employees know how to recognise signs of these schemes and understand how to handle suspicious claims.
Working together to stop 'cash for crash'
Cash for Crash schemes are a challenge for the insurance industry, but proactive steps can help reduce their impact.
Educating customers and raising awareness are crucial in preventing exaggerated claims. By promoting vigilance and teamwork, we can protect honest customers and maintain a fair insurance system for everyone.
More information
We understand the importance of protecting our brokers and their customers against fraud. Discover our podcast, videos, articles and resources which contain advice on the different types of fraud, and how to spot and prevent scams. Read our fraud awareness page for brokers to help you and your customers stay safe.
