News Centre

The Association of British Insurers has revealed new figures on the number of bogus motor and home insurance claims made last year.

According to the association, 122,000 sham claims were discovered in 2009, increasing the detected value of insurance fraud up to £840m.

The figures show a marked increase on the previous year. The number of fraudulent claims rose by 14% on the preceding year, whilst the monetary value of policy claims also rose by 14% to 62,000.

The examples of attempted fraud include householders exaggerating claims to include items that they never owned, to dropping their TV set down a flight of stairs and claiming for an up-to-date model.

This marked increase was driven by 8,500 bogus personal accident claims made in 2009. The ABI cited examples of a man who had claimed for an injured hand after he claimed to have tripped on a pothole near his home, when he had, in fact, struck a wall in the heat of a domestic argument. Another notable case was that of a woman who submitted a claim after stating she had tripped on a loose paving stone, when in actuality she had sustained her injuries fleeing from a security guard who was pursuing her, as he suspected her of stealing from a shop.

Nick Starling, an ABI spokesman, objected to such claims driving up the prices of lots of cheap home insurance deals available on the market. He said:

"Our honest customers rightly object to having to pay higher premiums to subsidise the fraudulent minority, which is why insurers continue to up their game in the war on the cheats."

This report comes shortly after one published by the AA, which showed how much car insurance had risen due to bogus claims. The survey highlighted an increase in organised fraud, where criminals worked in concert to defraud insurance companies. The commonest method was the ‘crash for cash’, where accidents are staged in order to claim the cost of replacement or repairs from the insurance company of the innocent party.

The ABI pointed out that insurers are pulling out the stops to detect fraudulent claims, but the total amount of insurance fraud is estimated to be £2bn per year, adding an average £44 to premiums paid by honest policyholders.