What is car insurance fraud?
Key takeaways
Car insurance fraud happens when you deliberately gives false information to your insurer
Not updating your job title, being misleading about who drives your car the most and staging accidents are all examples of car insurance fraud
Penalties for car insurance fraud can range from fines to imprisonment, and make it more difficult to get insurance in the future
What is car insurance fraud?
Car insurance fraud is when individuals or groups act deceptively against insurers to make unlawful financial gains.
It can range from a driver not informing your insurer about a change in personal circumstances to criminal groups selling fake insurance policies.
UK car insurers identified fraudulent claims worth £501 million in 2023, according to the Association of British Insurers (ABI). That was an 8% increase from the year before.
Insurers pass the costs of fraud onto their customers in the form of higher premiums.
What are the main types of car insurance fraud?
Some of the most common types of car insurance fraud include:
Application fraud
This is when a driver give false information or withhold information on an insurance application to get reduced premiums.
For example, not telling insurers about an unspent conviction or pretending to drive fewer miles each year.
Fronting
Fronting is when an older and more experienced driver names themself as the main driver on a policy with a younger driver in order to get lower premiums, but the younger person does most of the driving.
For example, a mum declares herself to be the main driver on the car her daughter takes with her to university.
Pre-inception fraud
Pre-inception fraud is when a driver takes out a policy and then tries to claim for something that occurred before the cover started.
For example, a driver cracked his windscreen but didn't have windscreen cover. He adds it to his insurance policy and then claims the crack occurred the next day.
Exaggerated claims
Making a fake or exaggerated claim about the damage caused to the car or passengers during a crash.
For example, after a minor accident a driver pretends they suffered whiplash to receive extra compensation.
Imaginary passengers
Falsely claiming there were extra passengers in the car during an accident in order to get an extra or additional payout.
Staged accidents
Deliberately causing an accident in order to make an insurance claim. Sometimes all people involved will be in on the scam, but there are also cases of so-called 'cash for crash' frauds where people will try to engineer a crash with other cars so they can then claim on innocent people's insurance.
For example, a motorist slams his brakes without cause so that the cars behind him run into him. He then claims for whiplash injuries.
Vehicle dumping
This involves disposing of a vehicle, whether it be by selling or destroying it, then pretending it’s stolen and claiming for theft.
Ghost broking
When fraudsters sell drivers fake insurance policies by posing as an insurance broker or insurance company. This not only scams people out of money but puts them at legal risk since it is illegal to drive without valid insurance.
Is it fraud if I accidentally made a mistake on my car insurance?
No - the 2013 Consumer Insurance Act gives customers legal cover if they unknowingly give incorrect or incomplete information on their insurance applications. Your insurer cannot deny your claim because of non-disclosure unless you 'carelessly or deliberately' misrepresented your circumstances.
If you realise you have made a mistake on your insurance application, you should inform your insurer straight away. They may adjust your premiums in response, but this will help you avoid difficulty and stress if you need to make a claim.
Is it fraud to change my job title for my car insurance?
It depends. It is not fraud to tweak your job title to find a cheaper quote. In fact, it's recommended to save yourself a bit of money on your policy. But you must accurately represent what you do for a living.
For example, a journalist could legitimately call themselves a writer or a publisher on their car insurance, but it wouldn't be okay for a plumber to pretend to be an accountant.
Is it fraud to drive over my car insurance mileage?
Not necessarily. Since it can be difficult to accurately calculate your mileage, having a mismatch between the estimated mileage on your insurance and how many miles you actually drive is only likely to be a problem if:
you deliberately lied to your insurer in order to get a cheaper quote
you do not inform your insurer when you go over your estimated mileage
you do not tell your insurer about a change in circumstance that would affect your mileage (e.g. you start driving to work)
Is it fraud to insure my child's car insurance in my name?
Yes. If you name yourself as the main driver of a car that is driven more often by someone else, this is called fronting and it is insurance fraud.
Instead, you can put yourself down as a named driver on their car. Having a more experienced or lower-risk driver on a car insurance policy as a named driver can also reduce premiums.
📣 Did you know? 25% of 18-24-year-olds said they would consider lying on an insurance application to save money if they were struggling financially, according to the Insurance Fraud Bureau.
What are the penalties for committing car insurance fraud?
Committing car insurance fraud is likely to lead to severe penalties. You may receive:
fines
points on your licence
a criminal record
Any claim you made will be rejected, leaving you out of pocket. Your insurance policy will be voided, and you will not be able to legally drive again until you find new cover. Finding insurance in the future will be more difficult and more expensive.
How will my car insurance company know if I lied?
When you make a car insurance claim insurers will conduct an investigation. They have access to a variety of databases, experts and other sources which can uncover any untruths you may have told.
For example, insurers can:
See previous claims you had with other insurers on the Claims and Underwriting Exchange (CUE)
Look at Google Earth satellite imagery to see where a car was parked
Find out the specifics of how and when a car was damaged by consulting expert mechanics
Insurers have a lot of experience with insurance fraud and a large incentive to catch and punish people who attempt it. UK insurers caught 84,400 fake claims in 2023.
What are car insurance scams?
Car insurance scams are where fraudsters will involve innocent motorists in criminal activities.
Some common examples of car insurance scams include:
Crash-for-cash accidents
Someone will try to intentionally cause a crash so they claim on a car insurance policy.
It can also be known as flash-for-cash, where someone will flash their lights to let a driver go where they normally wouldn’t have to, then crash into them intentionally.
Another instance is slam-on fraud, where someone will brake unexpectedly so the driver behind will crash into them
Ghost broking
Ghost broking is when someone poses as a car insurance broker or provider and sells you a cheap insurance policy, often with terms that might seem too good to be true.
You pay for the fake policy and remain without valid insurance.
Compensation scams
A compensation scam is when someone will cold call you and say you can claim compensation for an accident you were in.
They’ll often pretend to be involved with official organisations to get your details and persuade you to pay for false services.
Ad spoofing
Similar to compensation scams, these fraudsters target people involved in accidents and pose as insurers to lure them to a fake website that can contain malware or spyware.
How can I protect myself against car insurance scams?
Car insurance scammers often use tactics designed to confuse, rush or pressure drivers into making quick decisions — especially after an accident.
Staying calm and following a few simple steps can help you stay in control.
To protect yourself:
Do your research
Be wary of unexpected calls or messages about your car insurance, and be careful about deals or offers that sound too good to be true.
Look up companies and brokers to see if they are legitimate, and if you receive an unexpected message from your insurer get back to them using the details on their official website rather than the number or email they contacted you on.
Know the red flags to look out for
Unbelievably cheap prices – if the deal looks too good to be true, it probably is. Ghost brokers lure people in with unrealistically low premiums.
Social media adverts or messaging apps – legitimate insurers rarely sell policies via platforms like Facebook, Instagram, WhatsApp or TikTok DMs.
Unusual payment methods – requests for cash, bank transfers, gift cards or cryptocurrency are major warning signs. Always pay your insurer or broker by card or direct debit.
No paperwork or official documents – genuine brokers will provide a policy schedule, insurance certificate and confirmation directly from the insurer.
Personal or free email accounts – emails from Gmail, Yahoo or Hotmail addresses are suspicious. Legitimate brokers use professional company domains.
Pressure to act quickly – scammers often claim an offer is “about to expire” to rush you into paying before you can check the details.
No FCA registration – every authorised broker must be listed on the Financial Conduct Authority (FCA) Register. If you can’t find them there, they’re not legitimate.
Incorrect or missing details – if your policy documents look odd, have spelling mistakes, or your personal details are wrong, contact the insurer directly to confirm the policy exists.
Communication goes silent after payment – once you’ve paid, ghost brokers often disappear, leaving you uninsured and out of pocket.
Install a dash cam
Clear video evidence can make it easier to prove what really happened and discourage fraudsters.
Document everything during accidents
Take photos of the damage, note vehicle registration numbers, and collect witness contact details.
Go through your insurer
Always report incidents through your official insurance provider. Avoid settling privately at the scene without proper documentation or legal advice — it could leave you unprotected.
💡 Top tip: You can check if a broker is legitimate by looking them up on the FCA register, and see if your car insurance policy is valid via the Motor Insurance Database.
How do I report a car insurance scam?
If you believe you have been the victim of a car insurance scam, you should immediately contact your insurer and the police.
You can also report car insurance scams to:
The Insurance Fraud Bureau (IFB) - use their website or call 0800 422 0421
Action Fraud - use their website or call 0300 123 2040
How can MoneySuperMarket help me avoid car insurance fraud and scams?
At MoneySuperMarket, we only work with trusted, FCA-regulated insurance providers, so every car insurance quote you see on our site is from a legitimate insurer you can rely on.
We make it easy to find safe, genuine ways to save money — from practical tips on reducing your car insurance premium to showing you real, verified deals that could save you up to £514
When you compare car insurance with us, you can be confident you’re getting a fair price from reputable insurers and avoiding the risks of car insurance scams and frauds.
Author
Saarrah Mussa
Former Content Writer
Saarrah was a MoneySuperMarket's in-house pet insurance expert. With broad experience writing across insurance products Saarrah is acutely aware of the complexities and costs consumers have to face...
Reviewer
Beth Leslie
Senior Insurance Content Editor
Beth is an experienced writer and editor who specialises in financial and economic content. She is currently the Senior Insurance Content Editor for MoneySuperMarket. Beth is passionate about making...
