Association of British Insurers (ABI) has reported that car and home insurance fraud is costing the average UK household £44 in higher premiums every year and that over £5 million of fraudulent claims go undetected every day. Firms are also detecting an increase in fraud and rejected £730 million of suspect claims last year.
Motor insurance scams include withholding details of speeding convictions, submitting an incorrect address when taking out a car insurance policy or naming a parent as main driver of a vehicle being driven mostly by a high risk motorist.
The ABI also said there has been a rise in fraudulent claims made on home insurance policies – including incidents where people have damaged their own property in order to cash in on ‘new for old’ insurance cover.
Household insurance saw the highest amount of fraudulent claims by volume, while motor insurance fraud had the highest level in terms of actual payout.
Additional ABI research revealed that 16% of people would not rule out making an exaggerated insurance claim and 44% think it is acceptable to increase the value of items when making a claim. Three out of 10 people also thought it was acceptable to exaggerate the amount of damage done to goods being claimed for.
