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Recession causes insurance fraud to soar

May 17, 2009 by admin  
Filed under News, News-Insurance

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According to a recent report the level of has been rocketing as a result of the bleak financial climate and the recession. A report was recently released by the , and officials from the ABI have said that in 2008 the number of attempts to defraud insurance companies increased by 17 percent compared to 2007.

Insurance related fraud is said to have become more prevalent in many different areas of the industry, including motor insurance fraud, travel insurance, and home insurance.

The Association of British Insurers has also said that there was a rise in the value of fraudulent claims that have been uncovered, with the value rising to £730 million in 2008, which reflected an increase of 30 percent.

The issue seems to be particularly prevalent in the motor insurance industry, where over 50 percent of fraudulent claims were made last year. However, insurance companies have been putting more stringent regulations into place to try and tackle the issue of insurance fraud.

One ABI official said that it was important for insurance companies to continue their crackdown on fraudsters, particularly during the recession, as this is when the problem tends to become worse. He said: ‘Fraud thrives in a recession so insurers are intensifying their crackdown on insurance cheats.’

It has also been pointed out that the rising level of fraud means that insurance companies are having to cover their costs by hiking up premiums for honest policyholders, who end up paying the prices for fraudsters’ actions during the recession.

Insurance companies have also recently stated that they will be cracking down more on those found to be driving without due care and attention due to actions such as eating at the wheel, messing with their stereo, arguing with a passenger, and other actions that could divert their attention from the road.

Tags: report, insurance fraud, insurance claims, insurance cheats, road, premiums, Recession causes insurance, Association of British Insurers

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