Fraudulent cash-for-crash claims increased by 51% in 2013, insurer Aviva claimed as it called for stronger sentences to deter fake road traffic accidents.
These bogus insurance claims have a value of over £10m and are at the highest levels it had ever detected, Aviva said.
So-called 'crash for cash' schemes see fraudsters deliberately stage car smashes on unsuspecting motorists and claim for the damage and whiplash compensation. Aviva said over 6,000 of the motor injury claims it had received were linked to organised gang activities.
Aviva's head of claims fraud Tom Gardiner said: 'The fast growth of induced accidents on our roads is cause for serious concern.
'We believe that convictions for motor injury fraud resulting from induced accidents should result in more custodial sentences that recognise the unique physical harm that this form of insurance fraud poses to motorists, as well as the wider social costs.
'Stronger sentences will deter would-be fraudsters and help to keep roads safer and premiums lower for customers.'
The insurers said it welcomed recent measures from Justice Secretary Chris Grayling to crack down on insurance fraudsters. These include new powers for courts to strike out claims where the claimant has been fundamentally dishonest.
Currently, even where a fraudster exaggerates his claim often by tens of thousands of pounds, he is entitled to recover his original claim, which provides little deterrent to discourage fraud, Aviva said.