Bogus insurance claims increasing

The number of fraudulent insurance claims is on the up and costs are being passed on to honest policyholders, the Association of British Insurers (ABI) has revealed.

The organisation claims one in 11 of all claims is false; a three-fold increase on the figures for 2003. The cost to the insurance industry was £1.65bn a year, it added.

The most common scam was to inflate the value of an item that is being claimed for, the body said, but it added that the industry as a whole was now fighting back against such activity.

“Insurance cheats are more likely to be caught than ever before,” said Nick Starling, director of general insurance and health at the ABI. “Cheats will pay a high price as future insurance and credit will be more expensive and harder to obtain.”