Insurance Fraud UK 2026: How Fake Claims Push Up Your Premium and How to Spot Them

Insurance fraud takes many forms in the UK. The big ticket headline categories are crash for cash schemes, fake or exaggerated claims, and ghost broking, where a fraudster sells a customer a worthless or non existent policy. Some of the fraud is committed by everyday customers and some is organised crime.

Whatever the source, the cost is real. Detected and undetected fraud feeds into the actuarial loading that insurers apply across the whole book. That means honest customers pay more on their car, home, travel and life policies because of fraud committed by others. This guide explains the main patterns, how to spot them and how to report them.

What counts as insurance fraud

Insurance fraud is making a false claim or providing false information to obtain an insurance benefit you are not entitled to. It can be opportunistic, such as inflating the value of a stolen item, or organised, such as a crash for cash gang.

Fraud also includes providing false information to obtain cover, called application fraud. Common examples are misstating annual mileage, where the car is kept overnight, or the named driver structure on a motor policy.

Insurance fraud is a criminal offence under the Fraud Act 2006 and can be prosecuted alongside related offences such as obtaining property by deception or perverting the course of justice.

The scale of the problem and what it costs UK households

The Association of British Insurers reports that detected fraud runs into the hundreds of millions of pounds a year across the UK insurance market. Industry estimates suggest fraud adds tens of pounds to a typical motor insurance premium.

The Financial Conduct Authority oversees how insurers underwrite and price policies. Insurers must price fairly, but they price the risks they observe, including the risk of fraud in different postcodes and policy types.

Local authorities, the police and the Insurance Fraud Enforcement Department (a specialist policing unit funded by the industry) coordinate investigation and enforcement.

Common fraud patterns: crash-for-cash, ghost broking, exaggerated claims

Crash for cash is the most photogenic fraud pattern. A criminal gang stages a road traffic collision with an innocent driver and submits exaggerated injury, vehicle damage and credit hire claims. Indicators include a sudden, unnecessary brake by the lead vehicle, multiple identical injury claims from the same address and instant referrals to specific solicitors and credit hire companies.

Ghost broking is where a fraudster pretends to be a regulated insurance broker and sells customers a policy that does not exist, or buys a real policy in the customer's name using false information and then pockets the difference. Common targets are young drivers and recently arrived UK residents who are unfamiliar with how UK car insurance works.

Exaggerated claims are where a customer inflates the value or number of items in a household contents claim, or claims for damage that is older than the incident. They can also include misrepresenting the cause of damage to convert an excluded peril into a covered one.

Application fraud is misstating information at the point of buying cover. The policy may still pay out, but the insurer can void the policy or refuse the claim if material misrepresentation is found.

How to spot a fake claim or a fake broker

Check the FCA register before buying any policy. Every authorised broker or insurer is listed at fca.org.uk and the register shows the firm's authorisation status, products it can sell and any restrictions.

Be cautious of any insurance deal sold via social media direct message, especially at prices that look much lower than mainstream comparison sites. Ghost brokers often advertise on social platforms and use fake reviews.

On the customer side, watch for staged collisions that involve sudden inexplicable braking, claims pressed instantly by an unknown solicitor, and any approach from a 'claims management company' offering to handle a claim you did not need handling.

If a third party is involved in a road traffic incident, take photos at the scene, swap details and report to your own insurer before agreeing anything with another party's representatives.

What to do if you are a victim

If you discover you have bought insurance from a ghost broker, your policy will be invalid. Driving without valid insurance is a criminal offence. Contact a legitimate broker immediately and report the ghost broker to Action Fraud or the Insurance Fraud Bureau.

If you are the target of a staged collision and you suspect fraud, tell your insurer at the first opportunity and provide any evidence you have. Refuse to admit liability at the scene. Your insurer's anti fraud team can pause settlement and investigate.

If a claim is rejected because the insurer alleges you committed fraud, you can complain to the insurer first and then to the Financial Ombudsman Service if the matter is not resolved within eight weeks.

The Insurance Fraud Bureau and how to report

The Insurance Fraud Bureau is the industry's central intelligence unit on organised insurance fraud. The bureau accepts tip offs and works with police, insurers and the Insurance Fraud Enforcement Department on investigations.

Action Fraud is the national fraud and cybercrime reporting service. It is part of the City of London Police and is the official route for reporting individual fraud in England, Wales and Northern Ireland.

Scotland has its own reporting service through Police Scotland. The Financial Conduct Authority can also be informed if the fraud involves an authorised firm or a ghost broker holding themselves out as authorised.

Frequently asked questions

How much does fraud add to UK insurance premiums?

Industry estimates suggest fraud adds tens of pounds to a typical motor insurance premium. The Association of British Insurers publishes annual estimates and the Insurance Fraud Bureau publishes operational figures.

How do I check if a broker is legitimate?

Search the Financial Services Register at fca.org.uk. Every authorised broker is listed with its firm reference number, the products it is authorised to sell and any restrictions.

Is application fraud actually a problem?

Yes. Misstating mileage, garaging address or named driver structure is a form of insurance fraud. The insurer can void the policy or refuse a claim if material misrepresentation is later found.

Where do I report a suspected fraud?

Action Fraud is the national reporting route for individual fraud in England, Wales and Northern Ireland. The Insurance Fraud Bureau also accepts tip offs, especially on organised crime. Police Scotland handles reports north of the border.

What is the difference between a ghost broker and a regulated broker?

A regulated broker is authorised by the FCA and listed on the public register. A ghost broker is not. Ghost brokers usually sell through social media or word of mouth and either issue a fake policy or use fraudulent application information.

Can my insurer share my information with other insurers?

Yes. UK insurers share claims and policy data through industry databases such as the Insurance Fraud Register and the Claims and Underwriting Exchange. This is set out in the privacy notice you receive at the point of purchase.