Motorists are being advised to be extra-careful on the roads because the number of ‘crash for cash' deliberate accidents is increasing. The Insurance Fraud Bureau (IFB), claims 'induced accidents' - whereby drivers cause a crash on purpose to profit from bogus insurance claims - are rapidly becoming a serious problem. Moreover, they cost the insurance industry over £200m in payouts.

The Insurance Fraud Bureau, (IFB) is an industry-funded organisation which investigates fraudulent claims. Deputy chairman, Richard Davies says that when this practice started it was restricted to the north west of England but now there are more incidences across the south east, especially around London. Mr Davies thinks it is now an issue of major safety and national concern.

In Manchester, over 10 people have been charged with helping to commit fraud by dangerous driving in the last month, A further 25 people were arrested in London for pretending to be witnesses in a large crash-for-cash syndicate involving top-of-the-range cars.

Adrian Webb from insurer Esure comments that this scam of induced accidents is one of the most quickly growing areas of claims fraud. He also said that it is one of the most dangerous because unlike most fraud, it can physically hurt or even kill someone.

In a crash-for-cash incident, the fraudulent driver will usually brake suddenly when exiting a motorway junction, thus making the car behind crash into the back of them. These scam drivers sometimes even disable their brake lights so that the driver behind has no warning to slow down.

Once the parties involved have exchanged insurance details, the fraudsters will begin making claims for personal injuries they don't have - and in some instances, making them for people who weren't even present. Even if they were the only person in the car, they will claim for additional passengers as well as claiming for damage to their vehicle. In some crash-for-cash rings, there are bogus witnesses, people saying they were at the accident scene when they weren't.

One of the most popular claims by fraudsters is for whiplash injuries because it leads to the largest payouts from insurance companies. Whiplash claims alone account for around £66 of every car insurance policy in the UK. In addition, the Association of British Insurers (ABI) estimates that whiplash accounts for approximately three quarters of personal injury claims which represents more than a thousand every day, a 25 per cent increase in the last five years.

Whiplash doesn't show up in medical scans and often isn't experienced until days after the accident. Because it is difficult to diagnose, it is not easy for insurers to ascertain whether the claim is genuine or not.

Law-abiding drivers are picking up the bill for these non-genuine claims: the IFB estimates that insurance premiums rise at least 5 per cent to pay for fraudulent claims. Drivers who are victims of a crash-for-cash scam will lose their no-claims bonus, and be subject to higher subsequent insurance costs after the bogus claim.

Because of the nature of the fraud, it is impossible to tell if you've been caught up in a fraudulent accident until your insurance company receives a claim from the other party. It can also take a long time for an induced accident to be recognized because an insurer will only investigate if statements from witnesses don't tally the policyholder's version of events.