Insurance fraud costs £800 million a yearFraudulent claims cost £2.3 million a day
31 December 2010
Fake insurance claims are costing the industry more than £800 million a year, with the costs of investigating and repairing fraudulent claims leading to a rise in the cost of legitimate premiums.
According to the Association of British Insurers (ABI), dodgy home insurance claims are the most common form of fraud, with 170 homeowners lodging false claims every day. Car insurance claims are less common.
£44 cost to legitimate customers
The ABI's director of general insurance and health Nick Starling said: 'Insurance cheats do not prosper – they can expect to get caught, face problems getting future insurance and risk getting a criminal record.
'The majority of customers are honest and rightly object to subsidising the cheats. Insurance fraud adds an extra £44 to the average UK household’s annual insurance bill. This is why 2011 will see insurers intensify their war against the cheats, to protect their honest customers.'
Among the most spurious claims investigated include a case of a policyholder claiming he'd slipped on loose paving and sustained head injuries. In fact, he had been involved in a fight and was attacked with a baseball bat.
Another took part in a motor rally in Germany, in which his car was damaged. He shipped the car back home and claimed it had been damaged by an unknown motorist.
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