20% of Singapore’s motor insurance claims are fraudulent – GIAJ
One of the biggest insurance frauds in Singapore falsely claimed about S$1.6m.
About two in 10 motor insurance claims in Singapore are fraudulent, often involving exaggerated injuries and inflated vehicle damage, reported the General Insurance Association of Singapore (GIA).
These fraudulent activities are not simple schemes; they involve organized crime syndicates orchestrating fake traffic accidents and recruiting unwitting individuals to participate in their fraudulent activities.
In response to this escalating problem, the GIA has taken a significant step to raise awareness by releasing a revealing video that exposes the tactics used by these fraudsters and provides guidance for motorists to protect themselves.
Budget Direct Insurance fully supports this initiative to combat motor insurance fraud.
The proliferation of such activities has broad repercussions, impacting not only insurers but also all motorists in Singapore.
Simon Birch, CEO of Budget Direct Insurance, underscores that insurance fraud is an ongoing and pervasive concern. While insurance companies employ advanced technologies, including AI, to counter these fraudulent activities, he emphasizes the crucial role of individual vigilance in guarding against potential scams.
Fraud affects not just insurers but also consumers directly.
The increased claims payouts resulting from these deceptive activities inevitably lead to higher premiums for policyholders.
Moreover, the operational costs incurred by insurance companies in fighting fraud indirectly impact the annual premiums paid by policyholders.
Simon Birch stated, "Insurance fraud is a persistent concern with far-reaching consequences. While insurers use advanced technologies to combat fraud, it is vital for individuals to be vigilant and aware of potential scams to protect themselves. In the end, all motorists are victims of motor insurance fraud as we all end up paying higher premiums as a result."
A prominent example is one of the largest motor insurance fraud cases in Singapore, involving an auto workshop owner orchestrating fraudulent claims amounting to S$1.6m.
This intricate scheme revolved around the owner and his accomplice staging fake accidents and recruiting individuals to file fraudulent claims for accidents they were supposedly involved in.
Shockingly, these fraudulent claims went undetected for four years across 13 insurance companies.
"Staying informed is the first line of defence against insurance fraud. We strongly encourage everyone to watch this concise GIA video to gain valuable insights into the deceptive strategies used by fraudsters," Birch added.
Reported motor insurance scam scenarios in Singapore include:
- Beware of Phoney Helpers: After an accident, individuals may offer "help" and pressure victims to follow their directions, often leading them to unauthorized repair shops or overpriced towing services.
- Staged Accidents: Scammers stage accidents, causing victims to collide with their vehicles and then falsely accuse victims of causing the collision. They often fake injuries and make substantial claims for damage and injuries.
- Phoney Witnesses: Suspect convenient witnesses who support the other driver's account, often suggesting a staged accident.
To protect themselves from car insurance fraud, motorists can take the following steps:
- Install a Dashboard Camera: A dashboard camera provides real-time video evidence of accidents, which can be invaluable in proving your case to insurers, the police, or legal authorities.
- Report the Accident Promptly: Quickly reporting accidents to the police and your insurer allows you to control the flow of information, ensuring that accident details are recorded fairly and promptly.
- Use Your Insurer's Authorized Workshop: After an accident, avoid using towing services or workshops recommended by strangers, especially immediately after the incident.
- Report Fraud: Report any actual or suspected cases of insurance fraud to your insurance company or to the General Insurance Association of Singapore (GIA) online.