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Rise in fraudulent insurance claims

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Insurers have seen a steep increase in the number of fraudulent claims in the wake of the recession, figures have suggested.

More than £700 million worth of claims were found to be false last year, according to the Association of British Insurers (ABI).

The home insurance sector saw the most dodgy claims, with more than 55,000 fraudulent applications worth a total of £110 million, while false car insurance claims totalled the highest value of the year at £360 million.

Overall the value of claims jumped by 30% compared to the previous year, from £730 million to £560 million, while the volume of claims saw a 17% rise.

The ABI survey found that the figures may continue to increase, with around 20% of people saying they would not rule out making a false insurance claim in the future.

Nick Starling, ABI director, said: "Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats."

He added that insurance fraud also has an impact on honest customers, with false claims adding an extra £40 a year to the average premium.

© Press Association 2009