Fraudulent motor insurance claims come to five million a week

According to a recent report motor insurance bodies have discovered fraudulent motor insurance claims that are amounting to around £5 million a week in terms of value. Officials from the Association of British Insurers said that last year around twenty four thousand fraudulent motor insurance claims were uncovered, and these amounted to £260 million, which equates to £5 million a week. This reflects the level of the problem when it comes to fraudulent insurance claims, both in the motor insurance sector and other insurance sectors.

Amongst the fraudulent claims that were uncovered was one where a man had pushed his vehicle off a cliff and then claimed that it had been stolen. The ABI said that these fraudulent claims were resulting in honest motorists having to pay around £40 extra a year on their premiums to cover the cost of fraud within the industry. Over the past three years the number of dishonest claims over motor insurance has rocketed by around 70% according to ABI figures.

One official from the ABI said: “Insurance fraud is no victimless crime. Honest motorists pay through higher insurance premiums,” said Nick Starling, the ABI’s director of general insurance and health. This is why insurers are ramping up their crackdown to weed out the cheats. Anyone committing insurance fraud is more likely to get caught, risks a criminal record, and will find future insurance and credit harder to obtain and more expensive.”

In addition to the losses that the insurance industry faces over payouts on fraudulent claims, there is also the cost of tackling fraud within the motor insurance sector to be considered, although the ABI did not put a figure on the amount that had been spent on tackling fraud.

Recent Additions:

• Employers say economy at risk of recession
• Central bank governor and deputy governor did not agree on interest rates
• Mortgage lender offering some impressive rates on savings
• Bank savings interest rates start to come down
• Pay and bills could further affect consumer finances