Wednesday 24 January 2018

#MyCar2015 - Staged road accidents put an extra €50 on your insurance premium

Staged road accidents put an extra €50 on your hefty car insurance premium each year. Graham Clifford on what to look out for the next time you approach a roundabout.

Head of general insurance at Insurance Ireland Michael Horan
Head of general insurance at Insurance Ireland Michael Horan

Graham Clifford

It was a Friday afternoon in ­autumn 2012 and 28-year-tradesman Sean from just outside Tralee was heading home from Limerick after a week's work.

He'd grown so accustomed to the drive home that he often joked he could navigate the route blindfolded.

In nine years of driving he hadn't had as much as a scrape, priding himself on the fact he passed his driving test on his first attempt.

But as he approached a roundabout on the outskirts of Limerick city a motorist was waiting for him. "I entered the roundabout as normal - I come from a very rural area in Kerry where we don't have any roundabouts so, if anything, I'm extra vigilant when I drive up to them," explains Kieran.

"I didn't notice anything unusual. A red car slowly circled the roundabout and indicated it was taking the same exit as I was."

He checked the coast was clear and followed the red car, but as it reached the exit the leading vehicle stopped abruptly.

Kieran recalls: "I was driving slowly but there was no space to stop so I drove into the back of the red car in front. Because of the speed we were travelling the damage to both vehicles was minimal."

But what happened next has become the trademark of fraudulent motor 'accidents', where a car loaded with people is involved in a minor collision and the motorists and most, if not all, of the passengers claim to have suffered personal injury.

"I looked in and the car was full of people and they were all moaning and groaning," says Kieran. "I asked the driver why he had braked so suddenly, I thought maybe an animal had run out onto the road or something, but he denied he braked at all, saying that I accelerated and caused the accident."

Kieran ended up losing his nine-year no claims bonus, his premiums increased by €200 a year, and those who caused the accident claimed thousands off his insurance - another victim of a fraudulent motor scam culture which costs Irish insurance companies approximately €120m each year and adds nearly €50 to your average motorists' premiums.

It was only weeks later, when a co-worker of Kieran's was involved in a similar accident in Limerick, that he realised the whole thing had been a dangerous set-up - but the fraudsters were never caught.

This week Michael Horan, head of non-life insurance at the lobby group Insurance Ireland, warned people that insurance-fraud rings are in operation on the roads of Ireland and told motorists to be vigilant.

He advised anyone involved in such an accident to call the gardaí immediately, take pictures of the damage and count the number of occupants in the other vehicle. "We've noticed a spike in fraudulent car accidents in Galway recently but also in other parts of the country," said Mr Horan.

It's understood that insurance companies are concerned about what they regard as a spate of spurious accident claims in other locations, too: Swords and Tallaght in Dublin; the Cork area; the Border region; and Ennis, Co Clare.

Insurance companies have reported a surge in claims, something that has been picked up in figures from the Injuries Board.

The board, a State body that deals with insurance claims, has seen the volume of claims rise by almost a third since 2008.

"Of course, the vast majority of insurance claims are legitimate but we are asking motorists to be aware of this activity," said Horan.

Insurance Ireland set up a special claims committee in January in a bid to tackle what is seen as a rise in dodgy claims.

Fraudulent insurance claims are estimated to reach €200m a year in Ireland with around 60pc of those relating to motor accidents.

And Horan said the cost to the State means the financial impact of fraudulent accidents exceeds the amount paid out by insurance companies.

"When you have such an accident, the ambulance will have to be called as well as the gardaí and sometimes the fire services - all of this places additional pressures on the already stretched emergency services," he said.

The incentives for criminals to orchestrate accidents in Ireland worries insurance companies.

While a successful claim for whiplash can result in a payout in Ireland of up to €18,000, the same injury in the UK will see insurance companies pay out no more than £4,000 (€5,475).

And people like Kieran, the impact is more than just a financial one.

"It sickened me that anyone would put my life in danger by stopping their car in front of me. For months afterwards I was a nervous wreck driving. I doubted my driving ability and kept thinking a similar accident would occur again. I was so lucky that I wasn't injured myself.''

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