Motor fraud costs £410m out of £840m total insurance fraud

Association of British Insurers (ABI) figures show that last year insurers detected more than 2,000 dishonest insurance claims each week worth more than £16m.

ABI figures show that in 2009:

  • 122,000 fraudulent insurance claims were uncovered, up 14% on 2008. The value of these claims, at £840m, rose by 14% on the previous year.
  • Motor insurance frauds were highest by value, with dishonest claims totalling £410m uncovered. The most common frauds involved home insurance, with 62,000 bogus or exaggerated claims detected.
  • 4% of all claims by cost were fraudulent. This is similar to 2008, although double the figure of five years ago.

Many of the 8,500 dishonest liability claims exposed involved bogus personal injuries. Examples of such frauds include:

  • A man claimed he had fractured his hand after falling over a pothole in the street, when in fact he had sustained the injury after he punched a wall during a domestic dispute.
  • A young woman claimed to have tripped over a loose pavement, when in fact her injuries were actually sustained from jumping down a flight of stairs while running away from security guards on suspicion of shoplifting.
  • Head injuries allegedly sustained by falling over, were in fact sustained after being hit on the head by a baseball bat during a fight.

War on cheats

Nick Starling, the ABI’s director of general insurance and health, said: “Reducing fraud remains an ongoing battle for the insurance industry. Our honest customers rightly object to having to pay higher premiums to subsidise the fraudulent minority, which is why insurers continue to up their game in the war on the cheats.

“Whether claiming against a third party for bogus personal injury or on their own insurance, fraudsters are more likely than ever to get caught, leading to more expensive and harder to obtain insurance and credit, and the possibility of a criminal record.”

The ABI is promoting the confidential Cheatline run by the Insurance Fraud Bureau (IFB).