The Association of British Insurers (ABI) has suggested the issue of insurance fraud costs the industry significant amounts of money each year.
Malcolm Tarling, spokesperson for the ABI, said the sector is currently making a loss of approximately £1.6 billion a year through fraud.
Although such claims may be for relatively small amounts of money, Mr Tarling said that when added together they represent a "huge" loss for the industry.
In addition to posing a serious problem for the insurance sector, consumers may find fraudulent claims affect them too, Mr Tarling said.
"[Insurance fraud] also adds about five per cent on to all premiums, which is then paid for by honest customers," he stated.
According to figures produced by the North West Forum, one in ten adults have admitted to making a fraudulent insurance claim.
The organisation noted that nearly half of all false claims come under home contents or buildings insurance policies.
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