Economy, Business And Markets

‘Crash for Cash’ Car Insurance Scams Rising

‘Crash for Cash’ Car Insurance Scams Rising
‘Crash for Cash’ Car Insurance Scams Rising

The head of the Central Insurance Company (Bimeh Markazi) has said the number of organized groups faking accidents in on the rise.

“We are faced with a number of organized criminal gangs that cause accidents for insurance money, adding that nearly 10 percent of all paid-out car insurance claims are now going to these illegal practices,” Mohammad Amin said in a television program on Sunday night.

Amin added that Iran has one of the region’s most advanced and well established insurance sectors.

Insurance penetration ratio is 1.7 percent in Iran, while the global standard is 7.5 percent.

Iran has 17 million people registered for third-party car insurance each year. “This insurance being the cheapest on offer,” he said, “and with the rise of bogus claims, this insurance is not covering the amount of damage inflicted to passengers.”

He added that, some organized gangs are pre-planning the crashes with witnesses acting along with the main actors in the fake situation, and the problem is becoming a serious issue for the insurance industry.

He said the insurance industry as a whole is struggling to keep up with the growing number of accidents and because of the situation being static on the whole, the industry is suffering.

Car insurance fraud has been on the rise globally over the past decade, with scammers in countries with well developed insurance markets using the “Crash for Cash” method. In markets like Russia and the CIS countries, dashboard cameras have taken the place of witnesses, reducing the rate or false claims considerably. Globally the market for dashcams has increased considerably in the past decade with companies across the Americas and Europe offering them as a deterrent and backup in the case of crashes.