Admiral Insurance had to void 500 motor policies last year when it found they had been obtained by giving dishonest information.
The insurer said it believes giving false information or witholding information is common, and that the internet is helping people to do this as it is easier to lie online than on the phone.
Common misdemeanours reportedly include denying previous motor convictions, and denying claims have been made. This is relatively easy when buying cover over the internet.
An Admiral spokesperson said that telling lies may get you cheaper insurance, but people should be aware that it is still fraud.
Insurers are starting to work together on various initiatives such as the Motor Insurance Database to decrease the amount of fraud, which has been recognised as a major problem.
