Insurance fraud can add to the cost of premiums for honest customers, but luckily, the industry is cracking down and is uncovering a huge amount of attempted fraud every day – and happily, this exposure helps to keep costs down.
According to figures from the Association of British Insurers (ABI), a whopping 130,000 fraudulent claims were uncovered last year, up 9% on 2013, totalling £1.62bn (up 3% year-on-year). This equates to 350 attempted instances of fraud per day, giving a daily tally of £3.6m.
Dishonest car insurance claims were the most common and highest value, with 67,000 being recorded last year at a value of £835m – up 12% and 3% respectively. However, the number of liability insurance frauds detected saw the biggest annual jump: 19,800 were uncovered (up 75%), worth an estimated £330m (an increase of 20% year-on-year).
Happily, there's one area that's seen a reduction in fraudulent claims, and that's property insurance. A total of 24,533 were detected last year, down 29% from 2013, while the value (£108m) fell by 21%. This reflects the "strong deterrent message" hitting home to potential cheats, the report noted, and that can only be good for the industry – and for customers.
"The vast majority of customers are honest, and should not have to pay for the fraudulent minority," said James Dalton of the ABI. "The insurance industry invests heavily in its counter fraud defences, and the results are helping to keep motor and home insurance competitively priced.
"Insurance cheats are now more likely to get caught than ever before, whether they are making a dishonest claim or lying when applying for cover to get a cheaper premium, and face long-lasting and serious consequences. As well as the possibility of serving a custodial sentence, they will find it difficult to obtain vital financial services such as mortgages and loans, while future job prospects are likely to be adversely impacted and family relationships suffer.
"Initiatives such as the Government's Insurance Fraud Task Force and the growth of the Insurance Fraud Register show that there will be no let-up in the battle against insurance fraud. Honest customers rightly expect nothing less."
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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