Insurers discover increased cases of fraud

British insurance companies are uncovering greater numbers of frauds every day.

According to the Association of British Insurers (ABI) in excess of £1 million worth of fraudulent insurance claims are made every day.

This number of claims uncovered and prevented rises to a total yearly claims figure of £480 million which represents three times the amount found in 2003.

Nick Starling, Director of General Insurance and Health at the ABI, said: “Fraudulent insurance claims cost £1.6 billion, and add £40 a year to the premiums paid by honest customers.

“But the industry is fighting back. Insurance cheats are more likely to be caught than ever before. And cheats will pay a high price as future insurance and credit will be more expensive and harder to obtain”

The majority of fraudulent claims (85 per cent) involve the claimant exaggerating the value of the loss of money or possessions, with over half of falsified claims regarding household insurance.

One example of a fraudulent claim concerns a man who asked for “recovery expenses” after allegedly suffering a heart attack on holiday in West Africa. He in fact used the money for visits to local brothels.

Tags: price, man, value, Insurance, fraudulent insurance claims, general insurance

The Great British insurance scam

Con-artists are costing the UK insurance industry £1.6 billion per year and we are suffering as a result.

The Association of British Insurers (ABI) claims that fraudulent insurance claims are rife in the country and innocent people are being penalised through increased premiums.

Research by the organisation shows that the average policy holder’s premium is £40 higher than it should be because £4 million worth of false claims are made every day.

The ABI carried out a survey which found that ten per cent of people have cheated their insurance company, either by completely fabricating a claim or exaggerating it.

Nick Starling, director of general insurance and health at the ABI, wants to see greater power given to the authorities to deal with the crime.

“Honest customers should not have to pay for cheats. These figures highlight that greater deterrents, such as criminal prosecutions, are needed to discourage fraud,” he said.

“This is why we are calling for police forces to be given more resources so that fraud can be treated with the seriousness it deserves.”

The ABI says that around 50 per cent of all fraudulent claims centre on home contents and building insurance.

Tags: premium, seriousness, average policy holder, Great, power