Motorists across the UK could face unlimited fines and up to 10 years in prison for engaging in fraudulent car insurance practices, as police and insurers crack down on the alarming rise in scams. Recent data shows a significant increase in fraudulent claims, with over 45,000 cases recorded so far this year—a 54% surge compared to 2023.

The Association of British Insurers (ABI) revealed that car insurance fraud has been costing insurers and customers dearly, with detected scams worth £501 million in 2024 alone. This represents more than half of all fraudulent claims identified throughout the year.

Mark Allen, the ABI’s Assistant Director and Head of Fraud and Financial Crime, commented, “Insurance is there to protect people and businesses should the worst happen. Fraud doesn’t just impact the victims that fall foul of scammers; it affects everyone that pays for an insurance policy—bogus claims push up the cost of premiums for all.” He emphasized that cracking down on fraud remains a top priority for the industry.

Detective Chief Inspector Tom Hill from the City of London Police’s Insurance Fraud Enforcement Department also stressed that insurance fraud is “not a victimless crime.” He warned that fraudsters not only inflate premiums for honest customers but also endanger motorists by selling fake car insurance or deliberately causing road collisions for compensation.

The consequences for those caught committing car insurance fraud are severe. Individuals found guilty could be handed an unlimited fine and sentenced to up to 10 years imprisonment. Recently, a man was convicted for selling over 900 fraudulent motor insurance policies and pocketing £200,000—he received a suspended sentence and community service. In another case, a woman exaggerated her injuries in a road traffic collision in an attempt to claim nearly half a million pounds, only to be caught by evidence from The Jeremy Kyle Show.

Ursula Jallow, Director of the Insurance Fraud Bureau (IFB), highlighted the importance of collaboration in tackling this issue. We’re working closely with insurers, law enforcement agencies, and industry bodies to protect the UK public from insurance fraud and scams,” she said. The IFB has launched an online fraud campaign to help consumers protect themselves in an increasingly digital world.

Research also showed that over a third of people aged 18-24 believe it is acceptable to lie on an insurance application to save money, with some influencers on social media encouraging this behaviour. The IFB is urging consumers to be vigilant and report any suspicious activity to their confidential CheatLine.

Motorists are reminded that insurance fraud comes at a high cost, not just for those committing the crime but for all policyholders. The cost of fraudulent claims exceeds £1 billion a year and contributes to soaring premiums, with some drivers facing annual costs of up to £3,000.

As the crackdown on fraud intensifies, the message from authorities is clear: if a deal seems too good to be true, it probably is. Drivers are encouraged to act cautiously and avoid falling victim to scams or engaging in fraudulent behaviour, as the consequences could be severe.