Introduction
Motor is the line where the Insurance Council of Australia’s members detected the bulk of opportunistic fraud in 2023, reported together with property at $560 million, and it is where the organised schemes described across this Knowledge Hub sit.⁴ The reasons are structural. Motor claims are high in volume, the values are large enough to be worth the effort, the evidence is often a vehicle that has already been repaired or scrapped, and a single collision can generate several claims at once: damage, injury, treatment, hire and loss of earnings.
This page gives the shape of the problem and points to the detailed article on each type. It is written for people who run or support a claims operation, so it deals in indicators rather than techniques.
Where fraud enters the motor lifecycle
It helps to think in stages rather than in a list of frauds.
At quote and inception, the risk is that the policy itself is built on false information. Application fraud covers false or incomplete answers about address, claims history, occupation or vehicle. Fronting is the specific case where an experienced driver is named as the main driver of a car mainly used by someone younger or higher risk. Ghost broking is a step further: an unlicensed seller supplies policies that are fake, manipulated or cancelled soon after issue, and the customer may not know they are uninsured.
At the collision, the risk is that the event itself was arranged. A staged accident is fabricated with all participants aware. An induced accident draws an innocent driver into a collision they could not avoid. Crash for cash is the umbrella term for both when they are run as a business, often with recruiters, passengers, recovery operators, medical providers and legal representatives playing set roles.
At the claim, the risk is inflation. Exaggerated claims begin with a genuine loss and grow beyond it. In NSW, SIRA identifies exaggerated claims as among the most common forms of CTP fraud.¹
At settlement and salvage, the risk moves to valuation. Total loss fraud works on the pre-incident value, the declared condition and modifications, and the salvage process, and organised versions tend to involve suppliers rather than customers.
Why motor fraud is a network problem
Each claim inside an organised scheme can look ordinary. The collision is real, the damage is real and the paperwork is in order. What gives the scheme away is repetition: the same telephone number, address, repairer, medical provider or vehicle turning up across claims that should have nothing to do with each other.
That is why detection in motor has moved from reviewing claims one at a time to looking at the relationships between them. Accurate entity resolution comes first, because the same person may appear under slightly different names or addresses. Link analysis then makes the connections visible.
The indicators handlers look for
None of these is proof of anything on its own. Most claims that show one of them are genuine. Their value is in combination, and in how often they recur across a portfolio.
At inception and policy level:
- Several applications or policies sharing an email address, phone number, device or payment method
- A mismatch between the named main driver and how the vehicle is actually used, including telematics that points to a different driver
- Rapid cancellation soon after a policy is issued
- Identical documents across otherwise unrelated applications
At the collision and first notification:
- Multiple occupants in one vehicle who all go on to claim injury
- Very quick involvement of particular solicitors, medical providers or recovery firms
- Damage that does not match the described collision
- Delayed notification of the incident followed by a very fast claim submission
- Incidents clustering in particular postcodes or on particular routes
At claim and settlement:
- Values well above market norms for the make, model and age
- Declared modifications or service history that do not match records
- The same suppliers appearing repeatedly on high-value claims
- Inconsistencies between the reported event and the loss claimed
Each list is drawn from the detailed articles, which explain the reasoning behind every indicator.
The Australian context
The two big CTP schemes have their own fraud regimes. SIRA works with insurers and NSW Police on CTP fraud, runs a hotline with the Insurance Fraud Bureau of Australia, and estimated in its Green Slip reform material that fraudulent and exaggerated claims add up to $75 to each Green Slip.¹ In Queensland, MAIC receives fraud reports, refers them to insurers and prosecutes under the Motor Accident Insurance Act 1994 where there is enough evidence.²
One thing that surprises people: the General Insurance Code of Practice does not cover compulsory third party (CTP) insurance, which it lists as motor vehicle injury insurance among its exclusions.³ The Code’s claims investigation standards apply to comprehensive and third party property motor claims, while CTP investigations answer to the scheme regulator.
At industry level, the ICA reported in May 2024 that its members had detected $560 million of opportunistic fraud in motor and property claims in 2023, and it set up a counter fraud and scams function to work on organised networks.⁴
Handling it fairly
Because most flagged claims are honest, the way a suspected case is handled matters as much as the detection. The Code requires an insurer to review its non-genuine claims indicators at least once a year to make sure they remain relevant, appropriate and do not discriminate.³ For a claims operation that means the rules and models that produce referrals need the same governance as any other decision an insurer makes. The Code of Practice article goes through what that involves.
Related Topics
First Notification of Loss (FNOL)
Sources & further reading
¹ NSW State Insurance Regulatory Authority, CTP insurance fraud
² Motor Accident Insurance Commission (Qld), CTP fraud (read 22 September 2026)
³ General Insurance Code of Practice, October 2023 update, paragraphs 10 and 195
⁴ Insurance Council of Australia, Insurance industry boosts fight against fraud and scams, media release, 21 May 2024
