False Claims Increase Amid Downturn

• News
• Published: 16 Apr 2009 in Motoring and Car Insurance

The number of fraudulent insurance claims has risen since the onset of the recession, figures show.

The Association of British Insurers (ABI) said 107,200 claims worth around £730 million were found to be false in 2008. This figure is 17% higher than the number of false claims submitted last year, while their value is 30% greater than the £560 million crooked claimers tried to rake back in 2008.

And a fifth of people would not rule out making a false claim at a later date, according to a the industry body`s survey.

One motorist even tried to claim for a stolen car that he had pushed over a cliff himself. But industry experts say this is not a victimless crime. False claims not only impact on insurers, they also hit customers in the pocket by artificially raising the cost of premiums for car insurance and other forms of cover.

The ABI said fraudulent claims were most common in the home insurance sector, with 55,000 false or exaggerated applications identified last year worth a total of £110 million.

ABI director Nick Starling said: "Fraud adds an extra £40 a year to the average premium, which is why the harder we make it for the cheats, the more competitive premiums will be for honest customers."