Bogus insurance claims increased by almost 10% between 2009 and 2010 according to new statistics.
Figures released by the Association of British Insurers show that 133,000 fraudulent claims were made. Almost half of the claims related to home insurance and 40,000 claims relating to car insurance were also made.
Insurance premiums have rocketed for young drivers since the EU announced plans to ban gender as a contributing factor towards car insurance. Recently it was revealed that young male drivers have to pay a staggering £4,000 for annual comprehensive cover.
According to the AA British Insurance Premium Index the annual car insurance premium increased by 3.6% over the three months ending in June 2011. Despite this high figure, this is the lowest rise in 18 months.
This follows two years of unprecedented premium increases as personal claims increase.
Research by a leading price comparison website found that 1.3 million motorists have or would consider deliberately causing a car accident to make a claim on their insurance.
It may come as no surprise then, that in the last 5 years fraudulent insurance claims have risen by 100%.
“Fraud continues to be one of the biggest challenges facing the insurance industry,” said Simon Douglas director of AA Insurance.
“However, we believe that this is just the visible tip of the iceberg – beneath the waterline there is a serious culture of insurance crime that must be stopped.
“While insurers are getting better at identifying attempts at fraud, the formation of a new police fraud unit early in 2012 will help ensure that insurance criminals are brought to book much more quickly.”
One of the biggest contributors to premium increases has been a false and exaggerated personal injury claim, comments Mr. Douglas.
A recent case involved a claim from a man who said he had to rely on a walking stick and wheelchair to get around, yet he was spotted pushing a caravan without difficulty. His £1 million claim was rejected and he was jailed for 9 months.
Insurance fraud costs the industry around £2 billion a year, putting an extra £44 on to the annual bill of every UK policy holder.
Shop around to save money on insurance whether its home insurance, pet insurance or car insurance. By comparing premiums you could save £100s if not £1,000s.
Guest post by MoneyExpert