Motorists warned of insurance scammers using AI

Earlier this year, Instagram account 'Evolving AI' shared an image online showing how easily fake damage can be artificially generated onto an image of a real car, highlighting how AI image generators could lead to an increase in insurance fraud.

To insurance experts, this is unfortunately old news. Motor insurance fraud in particular is on the rise in the UK, and there are strong signs that AI may be partly responsible for an increase in fraudulent claims.

In 2024, a report from Sprout.AI investigating the rise in AI-driven insurance fraud reported that 65% of UK insurance claims handlers have seen an uptick in fraudulent claims since 2021 – the same year that the first version of OpenAI's text-to-image model DALL-E was announced.

There are a number of ways that insurance fraudsters can use AI in their schemes, one being to use AI image, video, and text generators, to fabricate evidence to support false insurance claims.

Allianz, the world's largest insurance company, said that they had observed a 300% increase in incidents where apps were used to distort real-life images, videos, and documents between 2021 and 2023.

Fraudsters who think they will get away with making false claims with this new technology should be aware that the consequences of getting caught can be severe, especially now that insurers and the UK government are committed to cracking down on offenders with the new Joint Fraud Taskforce.

Making fraudulent claims using AI tools is considered insurance fraud and is a criminal offence under the Fraud Act 2006. Offenders who are caught could face fines up to £5,000 or, in serious cases or if you're a repeat offender, imprisonment of up to 10 years and a criminal record.

Getting caught submitting a fraudulent claim can also seriously impact your ability to take out insurance later on. Your insurer may add your name to the Insurance Fraud Register, which will inform other insurance providers of your offence. That means you could be charged higher premiums or you could be rejected for cover altogether.

Other motorists should also be aware of the ways that AI can be used against them in the form of fraudulent third-party claims.

Kara Gammell
Personal finance expert at MoneySuperMarket

Fake insurance claims aren't a victimless crime

There is a risk that AI image and video generation tools could be used by "crash for cash" insurance scammers, whose modus operandi is to purposely orchestrate motor accidents to make false insurance claims.

If you're involved in this kind of collision, a fraudster may try to use AI to make a fake claim against you, providing false evidence that a collision caused greater damage than in reality.

If you suspect that someone has tried to make a false insurance claim against you, you should contact your insurance provider as soon as possible. They'll share the information of the claim with you – like the time and place the alleged incident occurred – after which you can compile evidence to support your side of the events. In cases like this, it's useful to have a dash cam to provide supporting evidence.

How do insurers investigate car insurance claims?

Insurers will carry out standard checks on all insurance claims and look out for fraud-indicators, like a lack of evidence or inconsistencies in the evidence you provided.

There are a number of ways that insurers will verify car insurance claims:

• Written statements: As well as getting a written statement from you about the incident, they may ask for a statement from a witness as well or, if there is a collision with another vehicle, a statement from the other driver.

• Documented evidence: Depending on your claim, insurers may ask for different kinds of evidence, not just photographs of the damage. For example, if you're claiming for an injury, they'll ask evidence of the injury in the form of medical records.

• Police reports: Not all road collisions need to be reported to the police, but if someone is seriously injured, if there is significant property damage, if someone committed a driving offence, or if you didn't exchange insurance information with the driver then you should make a report. If a collision report is made, your insurer may ask for a copy.

• Video evidence: If you have a dash cam they may ask you to submit your footage of the incident as evidence. If you are involved in an accident with another motorists and there is a dispute over who is liable, they may even go so far as to gather CCTV footage.

• Blackbox data: If you have a telematics insurance policy, your black box can provide valuable evidence for your insurer. A black box records your vehicle's speed, brake action, and location as well as the time of day, all of which can help verify or disprove a car insurance claim.

If the evidence you provide with your claim is insufficient or if your insurer suspects that your claim is fraudulent, they may take their investigation even further. This can include appointing a loss adjuster to investigate your claim.

How to take pictures of your vehicle for an insurance claim

If you need to make a car insurance claim for a damaged vehicle, it’s important that you accurately document the damage in a way that's as truthful as possible. That means you should not alter photographs in anyway, like applying a filter, even if it's just to sharpen the image.

Here is how to take a good photo of a vehicle to give to your insurer:

• Photograph the damage as soon as possible after the incident. If your vehicle is parked on the side of the road, be aware of your surroundings as you move around it and keep clear of oncoming traffic.

• Use a camera or phone that is capable of taking good quality images, and make sure the lens is clean.

• Stand still and hold the camera with both hands to avoid motion blur. If you find it difficult to hold the camera still or upright, try bracing your arms against a stable surface like a wall or place the camera/ phone down on a stable surface use a self-timer.

• Photograph the vehicle in a well-lit area. If you don't have enough light, use a torch to illuminate the vehicle rather than relying on a camera flash, which can be harsh and might distort the image.

• Take both wide and close-up photographs of the vehicle, as well as photographs from multiple angles. You should also include the licence plate in the photos if you can.

• Don't tamper with the photographs in any way – not even to brighten the image or increase contrast. If you followed the above steps, then you shouldn't need to do any editing to make the damage clear and visible.