Insurance scams hit record high of £1billion a year

Rip-off insurance claims have hit more than £1 billion a year for the first time. Figures released by the Association of British Insurers make for grim reading and include the following:

  • Insurers detected 124,292 bogus or exaggerated insurance claims, the equivalent of 2,390 a week. The value of these frauds was £1.1 billion or £21 million uncovered every week
  • The most common scam is home insurance fraud, with 51,000 bogus claims worth £95.5 million detected in 2012
  • 42,700 fraudulent motor insurance claims costing £614 million were uncovered
  • The value of fraudulent claims doubled between 2007 and 2012, while detected frauds increased by a third.
  • The Insurance Fraud Bureau, an industry-funded organisation, is helping police investigate on 60 criminal gangs involved in £75 million of insurance scams

The Association of British Insurers also revealed details of some of the more outrageous attempted frauds. At the top of the list were 34 bus passengers who made claims following an accident, only to later admit they had been coerced by a fellow passenger who worked for a personal claims company. Another incident involved a man caught on film playing rugby despite attempting to claim £1million for a workplace accident.

Nick Starling of the ABI commented “There will be no let-up in the industry’s zero-tolerance approach to insurance fraud. Honest customers rightly expect nothing less. Never has it been harder to get away with insurance fraud. Never have the penalties, such as getting a criminal record and being unable to get future insurance and other financial products, been tougher.

“The impact of the Insurance Fraud Enforcement Department, the development of the Insurance Fraud Register and the work of insurers own fraud investigation teams underline our determination to deter potential cheats and come down hard on anyone who thinks making a fraudulent claim is ‘easy money’.”

While tighter legislation and more vigorous prosecution have helped to detect a greater number of frauds; it seems that sadly there’s still a lot more work that needs to be done.

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