Car insurance fraud: How to avoid most common scams

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What is insurance fraud
Types of insurance fraud
Types of insurance scams
Accidental insurance fraud
Consequences of fraud
Avoid becoming a victim of insurance fraud

You’d be forgiven for not knowing much about car insurance fraud — a recent YouGov poll showed 95% of us knew “little” or “nothing” about it. 👀

But it’s more common than you think. Insurance fraud costs insurers time and money, which gets passed onto drivers through higher premiums.

We’ll explain some of the most common types of insurance fraud, and how to avoid falling victim to a car insurance scam — or unknowingly committing insurance fraud yourself.

What is insurance fraud?

Fraud is defined as “wrongful or criminal deception used for financial gain”.

In the world of car insurance, this usually means giving false information to an insurer with the aim of paying a lower premium, getting paid more than you should for a claim, or getting paid out when you shouldn’t be.

There are a few different types of insurance fraud. There’s fraud that people commit on purpose, fraud that you could accidentally commit, and car insurance scams that an innocent driver could fall for.

Let’s have a look at some common examples of car insurance fraud. 👇

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Intentional fraud

Let's start with the type of car insurance fraud that people committ on purpose.

Abandoning a car

This is when someone hides or damages their car on purpose, and then makes a claim on their insurance for the value of the car. They’ll usually claim that the car has been stolen — and they might also sell parts of their original vehicle, and pocket the cash.

It’s a bit harder to get away with this nowadays because newer vehicles tend to have better security systems which make them harder to steal.

Staged accident

This is a type of “crash for cash” scam, where two drivers will plan to have a car accident so that they can claim on their insurance.

Fraudsters might also make personal injury claims for conditions like whiplash, a common injury which is quite difficult to disprove.

Some will even try to claim for an accident that never happened at all, but this is much more difficult to get away with.

Pre-inception loss

This is when someone tries to claim on their insurance for vehicle damage that happened before they were insured.

Some fraudsters try to get existing damage covered on a new insurance policy, while other uninsured drivers will try to take out cover straight after an accident, to try and hide the fact that they weren’t insured when it happened.

We ask our customers for a photo of their car when they get covered with us so we can see exactly how the vehicle looks at the start of their policy.


Some scammers deliberately overestimate the damage suffered in an incident.

For example, they could claim to be hurt more seriously than they really are. Or they could say damaged or lost personal items were worth more than their true value.

This can be seen as insurance fraud, especially if the claim turns out to be much bigger than the actual loss.

This is different from negotiation. So if your car has been written off and you’re just negotiating its value with your insurer, you won’t get done for fraud.

Accidents do happen but some drivers set them up or pretend to be more hurt than they really are
Accidents do happen but some drivers set them up or pretend to be more hurt than they really are

Insurance scams to watch out for

Now let's talk about scams - a little different to fraud, as they can often involve an innocent driver as a victim.

‘Crash for cash’

This is when someone deliberately causes an accident by crashing into you, or braking suddenly in front of you so that you hit them. Then they’ll try to claim against you.

This is a bit different from staged accidents, because it involves innocent drivers who aren’t in on the scam.

Ghost broking

Ghost brokers offer fake insurance policies to drivers looking for a good deal. They’re not real insurers at all — they’ll give their victims fake policy documents, or they’ll buy a real insurance policy on the victim’s behalf and then cancel it straight away.

They’ll often target people who might usually have to pay more for their car insurance — so young drivers, or drivers with penalty points on their licence.

Ghost broking can have serious consequences for victims. They could find themselves without insurance when they need to claim, and they could also get a fine or points on their licence.

Compensation scams

Many of us will have received a call from an unknown number, claiming that you’ve been involved in an accident.

They’ll usually say that you’re owed compensation, and they’ll ask for your personal details (usually your bank details) so that they can pay you out.

This is a scam — so it’s best to ignore them. Even if you have been involved in a car accident, you should contact your insurer as soon as possible, and they’ll let you know when you need to get in touch, and how they’ll try to reach you.

Sometimes scam callers will say that they’ve been told to call you by the Motor Insurance Bureau (MIB). Don’t take them seriously — the MIB doesn’t call members of the public about claiming for motor accidents unless they’ve already made a claim with them.

Make sure you don’t commit insurance fraud by accident

There are also some lesser known types of insurance fraud which can land well meaning drivers in hot water: for example, not telling your insurer about something important, or forgetting to update your details.

Here are a few examples.


You may be able to save money on your insurance by adding a more experienced friend or relative to your insurance, or by being a second driver on their policy.

But it’s important to be honest about who the main driver is. If you have a parent as the main driver on your insurance, but you do most of the driving, that’s fronting — and it counts as insurance fraud.


When you get an insurance policy, your cover is conditional on the essential details about you, your driving history, your vehicle, and how you use the car being true.

That’s because insurers use those details to decide if they can insure you, and how much to charge.

If any of those details are found to be wrong, it’s considered to be a misdeclaration, and your insurer might not pay out if you were involved in a claim. It could also count as insurance fraud.

Here are some of the most important details that you should double check before taking out cover.

  • Does your vehicle have any modifications?
  • Have you ever had an insurance policy cancelled by a previous insurer?
  • Have you told your insurer about any past accidents, claims, licence points, or convictions?
  • Do you use the car for work or business purposes?

Don’t forget about the little things

There are loads of other bits of information that insurers ask for when you buy a policy.

Some of these details are a bit more difficult to be 100% sure of (like your annual mileage). And some details are more likely to change while you’re insured (like your postcode, or marital status).

But keeping your insurer up to date with this stuff is just as important — and if you don’t let your insurer know if and when they change, it could be considered fraud.


If you’re involved in an accident, or you need to make a claim, you should tell your insurer as soon as possible — and tell them everything you know about the incident.

Depending on your insurer, you might have to do this within 24 hours.

If you don’t, they might have reason to believe that you’re not cooperating with the claims process. This can have serious consequences — they might refuse to pay your claim, or cancel your policy. And it could even be seen as insurance fraud.

What are the consequences of insurance fraud?

If you get caught committing insurance fraud, it’s unlikely that you’ll get off with a slap on the wrist. There can be quite serious consequences.

Your policy could be “voided”: This means that your insurer will cancel your policy, and treat it as if it never existed. This might not seem that serious on the surface, but it can make it really difficult to find cover in the future. Many insurers won’t cover drivers who have had their policies cancelled in the past — and those that do will probably charge a lot more.

At Cuvva, we void all fraudulent policies, and those policy holders won’t be able to use Cuvva again. This helps us to keep premiums down for genuine customers.

You could get licence points and a fine: If you haven’t been honest about your insurance details, then your insurance policy might not be seen as valid.

This would technically mean that you’re not insured, so you could even have your vehicle seized and impounded. You could also get 6 points on your licence, and a fine.

Your claim might be denied: If your insurance details are found to be incorrect following an accident or claim, your insurer might “repudiate” the claim. This means that they won’t pay out, so you’ll need to cover the costs yourself.

In some cases, you might even need to pay the other driver’s costs - which can be massively expensive.

Having an insurer cancel your policy could make it very hard to get a future policy
Having an insurer cancel your policy could make it very hard to get a future policy
Extra reading 📚
Why insurers cancel policies Learn more

How to avoid being a victim of insurance fraud

Sadly, it’s still quite easy to become a victim of insurance fraud. But there are a few things that you can do to minimise the chances of it happening to you.

Buy directly from your insurer: If somebody offers you car insurance in person, or through social media, it could be a ghost broking scam. Ghost brokers will usually either pretend to be a legit insurance company, or they’ll claim to have close connections with an insurer — and they’ll offer you what looks like a great deal.

But you shouldn’t trust it. The only way to be certain that you’re getting a real policy is by going directly to a regulated insurer.

These days, most insurers sell policies online (or through an app, like us). Even if you use price comparison sites to compare different providers, you’ll be taken through to the insurers site to finalise your policy.

Check before you buy: Even if your insurer seems legit, there are still a few checks you should do before you pay for your policy. All UK based insurers have to be regulated by the Financial Conduct Authority (FCA), so you should be able to look them up on the Financial Services Register.

If they’re not there, you should probably look elsewhere.

Get a dashcam: A dashcam is a video camera that films the road around you as you’re driving. If you’re involved in an accident, having a dashcam can help work out who was at fault – and it’s especially useful if you think the claim might have been fraudulent.

Keep your details up to date: This could prevent you from getting into hot water with your insurer.

There are quite a few details that your insurer needs to know about, and some are quite unexpected! Not to worry though — we’ve written about them in more detail.

What to do if you think you’ve been a victim of insurance fraud

Get in touch with the Insurance Fraud Bureau as soon as you can. It’s probably worth telling your insurer too.

You should also contact the police — just call 101 (unless it’s an emergency situation, in which case you should dial 999).

Sadly, people who lose money due to insurance fraud won’t always be able to claim it back. That’s why it’s really important to be aware of the different types of scams out there, and try to prevent becoming a victim in the first place.

Pssst! Quick plug. Cuvva offers flexible car insurance policies from 1 hour to 28 days, with no deposits, interest or nasty hidden fees. And it only takes a few minutes to get a quote.

Updated on 30th March 2023