Dishonest customers scam insurers out of more than £4 million every day, according to research out today.
A survey by the Association of British Insurers (ABI) revealed that one in ten UK adults admitted to having cheated on an insurance claim.
In total, the annual cost of insurance fraud to the industry is estimated to be around £1.6 billion.
This adds nearly £40 to the average premium paid every year by honest policyholders, the ABI said.
The industry body interviewed nearly 7,000 adults as part of their study into fraud.
It found that a tenth of adults – representing around 5 million people in the UK – admitted they had lied on a general insurance claim form.
Opportunistic fraud – committed by someone who ‘bumps up’ the price of a damaged item, for example – costs insurers more than £800 million a year.
The home was found to be the richest source for insurance cheats, with around half the cost of dishonest claims occurring under home contents and buildings insurance.
Weeding out cheats
Nick Starling, director of general insurance and health at the ABI said: ‘Honest customers should not have to pay for the cheats.
‘Insurers are committed to reducing the fraud problem. We are devoting greater resources to weeding out the cheats, and working together to detect and combat fraud.
‘The Insurance Fraud Bureau is already having a significant impact on tackling organised insurance fraud.’
He added: ‘These figures highlight that greater deterrents, such as criminal prosecutions, are needed to discourage fraud. This is why we are calling for police forces to be given more resources so that fraud can be treated with the seriousness it deserves.’
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