Insurance fraud is rising: the honest ways to reduce your premium

Allianz has reported a 10% increase in insurance fraud, with ghost brokers, 'crash for cash' scams and fake theft claims among the most common trends.

The insurer says it uncovered more than 33,000 insurance fraud cases in 2024, worth over £157m. That's the equivalent of 90 frauds a day.

While some examples of fraud are deliberately criminal, others stem from policyholders telling white lies or stretching the truth when applying for cover.

Read on to find out why fraud is on the rise, and for our advice on honest ways to get the best deal on your insurance. 

Compare car insurance deals

Check Which? insurance ratings and compare deals using the service provided by Confused.com

Get a quote

Bogus claims and dodgy scams

Allianz identified a number of trends involving policyholders and scammers being economical with the truth in order to get cheaper cover. 

The insurer detected a high number of 'ghost brokers'. These are not real insurance brokers, but criminals who sell non-existent or invalid policies to victims. 

It also reported drivers lying about injuries to claim on their car insurance and moped riders or couriers faking accidents to make claims. This is often referred to as a ‘cash-for-crash’ scam.

Another common type of fraud was the practice of recycling claims. This is where one claim is declined, only for the claimant to try and claim again in a slightly different way.

Examples of insurance fraud detected by Allianz include:

• Two men deliberately staged a collision and falsely stated the damage was worth around £60,000. They went on to submit bogus claims on their insurance. Inconsistencies raised alarm bells and the pair – along with a third man – were found guilty of fraud after a trial. 
• A claimant suffering whiplash injuries following a car accident later went on to claim for dental treatment worth £4,300 after claiming his face hit the steering wheel. The case went to trial and he eventually dropped the claim and agreed to pay costs.

Why is fraud on the rise?

Car and home insurance premiums have steadily risen since 2022, hitting record levels last year. Price rises are now finally easing, but recent research by The Green Insurer suggests some people are lying in a bid to reduce the cost of their cover. 

A survey of more than 1,000 drivers found 29% had taken to stretching the truth when applying for insurance. Of these, 63% either slightly or significantly understated the number of miles they drive each year. 

Ben Fletcher, director of fraud at Allianz UK, says: 'The vast majority of claims are genuine, and our focus as a business is to ensure we settle those promptly, but the sad reality is that some people will go to enormous lengths to make fraudulent claims.

'The increase in the amount of fraud can be attributed to several factors. The ongoing cost of living challenge and financial struggles people are facing is driving some people to commit insurance fraud.'

• Find out more: what's happening to car insurance premiums?

What can happen if you lie to your insurer?

At best, lying to your insurer could see your claim rejected. At worst, your policy could be invalidated or – in serious cases – you could face fines, prosecution and a criminal record. That's because dishonesty, either when applying for cover or making a claim, counts as fraud. 

As a result, you could potentially have your name added to the Insurance Fraud Register. This is an industry-wide database of known fraudsters, used by insurers when making underwriting decisions and assessing claims. 

If you end up on the list, you could struggle with future insurance and mortgage applications.

• Find out more: best home insurance 2025

Honest ways to reduce costs

Insurance prices might be high, but the risks of lying are simply not worth it. Here, we outline ways to keep the cost of your premium down without being dishonest.

1. Shop around

It's a cliche, but seeing what other deals are out there before renewing or buying a new policy is one of the most effective ways to secure lower premiums. 

Price comparison sites such as Compare the Market, Confused.com, GoCompare and MoneySuperMarket allow you to view multiple car insurance quotes at a glance. 

Not all insurers are on comparison websites, so you'll need to get quotes directly from them. Direct Line and NFU Mutual are examples of this.

2. Buy early

Renewing early could save you hundreds of pounds. 

With car insurance, you'll often get a cheaper price if you buy your cover a few weeks (rather than a few days) in advance of the policy start date.

Shopping around early also allows you to fully research the market or negotiate your insurer's price to make sure you get the best deal.

• Find out more: the worst time of day to buy car insurance

3. Choose annual cover

While paying for insurance in instalments can make the costs easier to manage, the interest charged on the monthly payments significantly impacts the amount you'll pay overall. 

If you need to spread your payments, one alternative is to buy cover upfront with an interest-free credit card, and pay off a 12th of the balance each month.

• Find out more: best 0% credit cards

4. Don't automatically renew

Never agree to the auto-renewal clause included in your insurance agreement. This means that once your initial one-year contract lapses, you will be automatically enrolled for another year at the price the insurer quotes for your renewal.

Instead, use the best quotes you've gathered to negotiate with your insurer and take your new business elsewhere if it doesn't improve its offer.

5. Tweak the excess

If you're willing to pay a higher excess, your insurer will offer a cheaper premium. However, make sure to select your excess carefully.

Setting the bar too high, especially if it starts getting too close to your claims limit, might make claiming on your insurance either pointless or too expensive.

6. Haggle for a better price

If you don't want to switch to another insurer, you might be able to get the price down by haggling. 

Contact your insurer to ask if it would be prepared to reduce its quote to keep your custom.

It will help if you've done a little shopping around first, so you can give examples of what its rivals are offering. 

• Find out more: how to find cheap home insurance