Fraudulent insurance claims reach record level

The number of fraudulent claims being made on motor and home insurance policies has reached a record high in Britain, with the value of detected insurance fraud ballooning to £840 million in 2009.

The Association of British Insurers (ABI) revealed that this marks a 14 per cent rise in fraudulent insurance claims over the previous year, with 62,000 of the 122,000 detected claims concerning home insurance.

According to the Guardian, these incidents ranged from home insurance policyholders exaggerating the number or value of items damaged or stolen when making a claim, to insurance customers deliberately dropping their old TVs down the stairs to claim for newer models.

The number of bogus car insurance claims is also on the rise, aided by organised fraud such as 'cash for crash' scams, whereby criminals arrange for road accidents to take place in order to claim repairs or replacements on the innocent driver's insurance policy.

While criminals may believe they are benefiting by defrauding insurers, the ABI revealed that the rise in incidents is pushing up the cost of insurance quotes by around £44 per year for all policyholders.

Nick Starling of the ABI said: "Our honest customers rightly object to having to pay higher premiums to subsidise the fraudulent minority, which is why insurers continue to up their game in the war on the cheats."

The association also revealed that 8,500 fraudulent personal liability claims were made in the UK last year, by policyholders who claimed to have received injuries falling in the street due to loose paving stones or potholes.

Mon, 26 Jul 2010 05:49:00 GMT