A record £840 million-worth of claims, including for car insurance and home insurance, were rejected by companies in 2009 because they were deemed fraudulent, the Association of British Insurers has said.
Firms refused to pay out on around 122,000 "fraudulent" applications, up 14% on 2008.
According to the association, insurance companies are better at detecting fraud and this can partly explain the rise in rejected claims. It also claimed that more people were trying to defraud companies with misleading claims because of the effects of the recession.
Around 4% of all claims were deemed to be fraudulent during 2009, almost double the rate from five years ago. This means an average of 2,000 claims worth £16 million each week were being binned.
The most common application deemed fraudulent was for home insurance, at 62,000 claims. Half of the rejected claims were for car insurance, which added up to around £410 million.
Companies rejected around 8,500 claims for liability, which they said were false. Many applications related to personal injuries on which insurers would have paid out an average £25,000 each.
