Fraudulent claims running at an average of 335 cases every day are costing insurance companies up to £2.3 million per day, new figures have shown.
A report by the Association of British Insurers (ABI) found that car insurance and home insurance are the most common targets for fraud.
Findings revealed that car insurance sees around 108 bogus claims uncovered daily - collectively worth £1.1 million - while nearly 170 fraudulent home insurance claims are found each day.
Nick Starling, director of general insurance and health, ABI, said: "The majority of customers are honest and rightly object to subsidising the cheats. Insurance fraud adds an extra £44 to the average UK household's annual insurance bill.
"This is why 2011 will see insurers intensify their war against the cheats, to protect their honest customers."
According to the report, insurance providers are using increasingly sophisticated techniques to detect dishonest claims, but many policyholders trying to commit fraud are found out because of their own stupidity.
In one instance, a man tried to claim on his home insurance policy for the theft of DVDs which he said he had bought locally, but the titles had yet to be released in the UK.
A woman reported her husband for exaggerating the injuries he received in a car accident after he walked out on her when he received a £385,000 payout. He had been pretending to be badly injured for three years.
© Press Association 2010