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Insurance fraud stepped up a gear by recession

16 April 2009 / by Rebecca Sargent
The number of fraudulent insurance claims made has shot up since the recession began, new figures from the Association of British Insurers (ABI) have revealed.

The statistics show that there are as many as 2,000 fraudulent insurance claims made each week – the claims are worth around £14million – an increase of 17 per cent compared to 2007.

The figures show that dishonest home insurance claims are the most common, as 55,000 false or exaggerated claims were detected in 2008. However, when it comes to the value of claims, car insurance claimants tried their luck with the most, declaring £360million worth of fraudulent claims.

Overall, the ABI found that four per cent of all claims (excluding life insurance), were fraudulent in 2008, an increase of one per cent compared to 2007.

Meanwhile, in separate research the ABI has discovered that one in five people would not rule out making a fraudulent insurance claim in the future.

Commenting, Nick Starling director of general insurance and health at the ABI, said: "Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats."

According to the ABI, fraud adds on average an extra £40 a year to an insurance policy.

Mr Starling added: "Cheating on your insurance really does not pay – you will get caught, future insurance will be more expensive and, along with credit, harder to obtain.

"The only thing you are likely to gain is a criminal record," he warned.

© Fair Investment Company Ltd