'Declan‘ (for the purposes of this article, we’ve changed his real name), told insurers his Range Rover slipped down a fishing pier slipway into the sea. The car was driven out of the sea but there was significant damage to the engine making the car a total loss.
Declan’s insurer paid him the vehicle's pre-accident value, and a £26K GAP claim immediately followed.
The RTA insurer never considered Declan had GAP Insurance - here at Crawford Legal Services (CLS) this is something we see often. There was no validation exercise: “well, these things happen…” the insurer said.
It turned out Declan had 26 thousand reasons to have his car deemed beyond economic repair. The incident occurred in the last two weeks of Declan’s three-year GAP insurance policy term. Given that Range Rover’s 4x4 capability is well documented as being legendary, how did Declan’s Range Rover end up in the sea? When CLS took carriage of the claim, the circumstances just didn’t add up.
Declan lives in Northern Ireland. He told insurers he intended to drive into Eire to fill up the vehicle with cheap diesel. The tank was empty, and it was a lovely day, so Declan and his brother-in-law ‘Ant’ decided to make a day of it. Eventually, they found themselves at an isolated fishing pier on the Donegal coast. There was no one around. After stretching their legs, they were caught in a sudden squall. Rushing back to the car they decided to turn around, fill up the car and return to Omagh.
Declan commenced a three-point-turn using the top end of the fishing pier slipway. His account was that his vehicle lost traction on the slippery slope that was covered in seaweed. He claimed the car then slipped inexorably into the sea. Luckily, Declan was able to regain traction, however by this time the water was around his feet. The car was driven back up the slippery slope, but the damage was done. The engine cut out for the last time. A recovery agent was called who confirmed the car had been in the sea. Declan and Ant began their journey back to Omagh and the insurance claim quickly followed.
The GAP claim & the fraud
GAP insurers were immediately struck by the timing of the claim – just before the end of the three-year policy term.
CLS was appointed to investigate the GAP claim. Straight away it was clear to our team that the RTA insurer had merely valued Declan’s vehicle and made a payment. No statement, no background checks. Here are some things our experienced team noticed and/ or discovered:
- The policyholder’s defensive attitude - he insisted his motor insurer had investigated the claim before payment so why did GAP insurers wish to revisit the incident?
- Our research revealed Declan had served a recent custodial sentence for VAT fraud. The conviction wasn’t directly related to the vehicle incident but showed a propensity for serious dishonesty.
- Analysis of the vehicle financial arrangements and vehicle use revealed a substantial over mileage penalty was fast approaching. This added to the straightforward financial motive.
- Declan was obliged to make a detailed statement – ‘Ant’ however told CLS that he would only make a statement with the assistance of a solicitor arousing further suspicion.
- Eventually, Ant would provide a statement but there were significant detail discrepancies between the accounts of Declan and Ant.
- Upon inspecting the location of the incident, the fishing pier was certainly remote and very small. However, there was ample room to complete a three-point turn without placing the vehicle on the slipway. In any event, the slip way was a shallow gradient and the upper end was well above the tide line with no indication of seaweed or algae.
- Weather records showed there had been no squall on the Donegal coast, on the day that Declan alleged the incident occurred.
Lessons for insurers
This scenario is one faced by insurers on a regular basis. The car was damaged and had definitely been damaged by seawater. The recovery agent confirmed that he had recovered the sea-damaged vehicle from the fishing pier. However, there was no ‘silver bullet’ piece of evidence which insurers often feel they need to decline a claim.
In this case, a detailed analysis of the accounts provided, the substantial financial motive for fraud, the policyholder’s previous dishonesty, and the unusual accident circumstances all came together as a compelling basis for the claim to be declined. Declan never challenged this denied claim.
This was a case that clearly highlights a number of issues that frequently arise for insurers.
CLS regularly advises a range of GAP insurers. In our experience, a common feature of GAP claims is the lack of any validation exercise conducted by motor insurers. Motor insurers routinely continue to overlook RTI GAP insurance policies as a motivation for fraud.
As already mentioned, insurers typically look for ‘silver bullet’ evidence before declining claims. An important aspect of this particular investigation was CLS’ careful questioning of Declan and Ant and committing them to a detailed account of an incident that never happened in the manner described. Scripted witnesses are often able to provide a basic incident account, but will break down under detailed questioning.
It turns out “these things happen….” doesn’t always ring true.
Stats show that GAP insurers are reporting a significant increase in the frequency of fraudulent claims. CLS has a proven track record of repudiating over 80% of claims where fraud is suspected.
For additional information please contact:
Head of Counter Fraud, Crawford Legal Services