According to figures from the Association of British Insurers(ABI), 133,000 fraudulent insurance claims worth £919m were mad in 2010 a rise of 9% compared to figures in 2009. That equates to the public registering 2,500 fake claims every week. Figures show that the number and value of detected insurance frauds has risen by more than 100% over the past five years.
Fraudulent claims cost the insurance industry around £2billion a year, which is reflected in policyholders’ premiums as it adds on average £44 a year.
The problem has escalated to such a point that insurers have been forced to set up an insurance fraud register which will start early next year, containing details of insurance cheats.
The most common type of fraud involved home insurance with 66,000 bogus or exaggerated claims, followed closely by 40,000 dishonest motor insurance claims. However motor frauds cost insurers the most; around £464million.
Facebook is helping to combat certain fraud cases; one claim for back injuries sustained from a fall at work was rejected when the claimant posted images on Facebook showing them performing gymnastics and training for a charity run.
Other claims that have been rejected include a woman who said facial injuries were caused by a toilet roll holder falling in a fast food restaurant, and a man claiming for injury caused by falling over a wall. Further investigation found that the toilet roll holder would have had to fallen up, and there was no wall at the scene of the accident.
Nick Starling, the ABI's director of general insurance and health, said: "Fraudsters continually look for new ways to con insurers, so we are upping our game. Early next year, we will be setting up a national insurance fraud register, which will contain details of all known insurance cheats. And at the same time the first ever national police insurance fraud investigation unit will begin its operations, making it harder than ever to commit insurance fraud."
The Insurance Fraud Bureau is continually calling on the public to help them combat the rise of people committing insurance fraud. Consumers can now report suspected fraudsters to Cheatline, an organisation that has access to industry data, and work closely with insurers, law enforcement, and regulators to battle the rising costs.
A spokesperson said, "It's important to underline that some of those concerned with insurance fraud are also involved in criminal activities where there is harm to local communities."
By Ben Malkin
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