Insurance Fraud Costs Consumer

Insurance Fraud Costs Consumer

Friday 18th May 2007

Figures out this month released by The Association of British Insurers show that insurance fraud is costing the insurance industry around £40 million a day – racking up to a whopping £1.6 billion a year.

False claims along with customers causing deliberate damage to property in order to make claims are adding on average around £40 to the typical household insurance policy. It is also estimated that around half the total number of dishonest claims occurred under home contents and buildings insurance.

Other common examples of insurance fraud include exaggerating claims for injury against local authorities for example following a trip over paving stones and also overestimating the value of personal items lost while travelling.

Nick Starling The Association of British Insurers Director of General Insurance and Health states that ‘honest customers should not have to pay for cheats’ and also added that more deterrents such as criminal prosecutions are needed in order to discourage insurance fraud.