Brits Hit For £50 Each By Insurance Scams

The average British household is having to fork out almost £50 a year to cover the cost of a surge in dodgy insurance claims, new research shows.

The Association of British Insurers said fraud has soared to an estimated £1.9bn a year, costing the average household £44 annually in higher premiums.

Insurers think around £5.2m of fraudulent claims go undetected every day, a 24% increase compared with two years ago.

But firms are also detecting more fraud, with suspect claims

worth £730m rejected last year, up almost a third from 2007.

Nick Starling, of the ABI said: "There is no hiding place for insurance cheats. Honest customers should not have to pay for the fraudsters.

"Closer scrutiny of proposal forms and claims, as well the exchange of information through industry-wide databases, is tightening the net on the cheats."

The ABI said dodgy claimants had responded to this by shifting their focus to the other end of the process, with more people lying or withholding relevant information in order to get cheaper cover.

Popular scams included withholding information about a speeding conviction, listing the wrong address for a motor insurance policy or listing a parent as the main driver of a vehicle that was used most by a newly qualified driver.

The ABI said it had also seen an increase in the number of fraudulent accidental damage claims made on home insurance policies, with people deliberately damaging furnishings or electrical goods so that their insurer would pay for new ones.

It also reported a 35% increase in claims involving the damage or loss of high value watches, laptops and LCD televisions.

Household insurance policies saw the highest level of detected fraudulent claims by volume, while motor insurance ones had the highest level in terms of value, with staged accidents still common.

Research carried out by the ABI found that 16% of people would not rule out making an exaggerated insurance claim, while 44% think it is acceptable to increase the value of an item when claiming.

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