Crash for Cash – Australia’s Fraud Problem

A surprisingly common form of insurance fraud is staged car crashes. Nicknamed ‘crash for cash’, these are pre-meditated, organised and/or staged traffic collisions set up deliberately to profit from the insurance policy. Another example of claim farming, the crash for cash business is booming in Australia at the moment and can be seen across the country. Insurance companies struggle to identify real collisions amongst the fake, making the process of genuine pay outs slower and more stressful for honest individuals.


There are many different ways to organise a crash for cash but popular ‘stings’ involve the criminals acquiring a potentially valuable car in poor condition, repairing it, insuring it for a far higher value than it is worth, and then crashing it deliberately to ensure it is written off. They then claim for the full amount and walk away with a healthy, illegal profit. Sometimes cars are taken to repair shops after the crash where the mechanics are also involved in the scam and charge exorbitant rates to the insurance companies for the work. Other drivers claim for medial expenses on the basis on non-existent but hard to prove injuries. Whiplash is a particularly popular one.


These crash for cash claimers rarely work alone. Teams of them target high-end models from car manufactures such as BMW, Mercedes-Benz and even Ferrari. Many involved in this form of insurance fraud also operate within car theft rings and other organised crime branches. The accidents are often at night and in areas with low foot traffic to minimise the risk of witnesses. The claimants sometimes deliberately deploy the airbag to make the impact appear greater than it was. Some insurance agencies have begun, with the help of police investigations, to flag certain surnames, believing they had identified families who are orchestrating crashes for cash regularly. However, the problem still remains.


One of the biggest problems, aside from the criminal nature of these crashes for cash, is that the proliferation of these claims is driving up the price of car insurance for honest policy holders. Not only are insurance companies having to pay out larger sums of cash for these ‘accidents’ but they are also investing in more advanced forensic testing, irrespective of the legitimacy of the claim. These heightened costs are being passed onto the consumer and raising the cost of all policies as a result.


Insurance companies warn drivers to be aware of getting involved in crash for cash staged incidents. As well as working with fellow criminals, some people drive around cities and suburbs waiting for opportunities to cause impromptu small crashes which can then be blamed on the other driver. They typically target mid-range or higher cars whose value would suggest the driver has paid for insurance as well as drivers who are least likely to make a fuss at the scene, such as mothers with children in the car. Keeping a safe distance from the car in front of you, being aware of hazards and keeping an eye out for erratically driven vehicles will help minimise your risk of involvement in a staged incident. In the unfortunate event of a crash, never admit liability at the scene as this can be used by the other ‘victim’ as proof of your guilt and their innocence. Take photos and keep careful record of what is said at the scene. It is always a good idea to call the police irrespective of whether the crash is severe. If there are people in the area, be aware that some gangs will plant their own people in the crowd to act as witnesses on their behalf. If you suspect the car which hit you was attempting to make a fraudulent claim, contact the Insurance Fraud Bureau of Australia immediately and pass on the details to them.

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