A survey conducted by the Association of British Insurers concludes that fraudulent insurance claims are now costing insurers and honest customers over £4 million ($7.98 million) every day. The annual cost is around £1.6 billion ($3.19 billion).
The survey found that “one-in-ten adults admitted to having cheated on their insurance.” As a result the costs are reflected in higher premiums, which, according to the ABI, add “nearly £40 ($79.78) to the average premium paid each year by honest policyholders.”
The ABI surveyed around 7,000 adults. Among its conclusions were the following:
– One in ten adults – 5 million people – admit to having made a fraudulent claim on a general insurance policy, such as home or motor insurance.
– Opportunistic fraud carried out by individual customers alone costs over £800 million [$1.6 billion] a year.
– The home is the richest source for insurance cheats: around half the cost dishonest claims occur under home contents and buildings insurance.
Nick Starling, the ABI’s Director of General Insurance and Health, inveighed against “the cheats,” and the fact that “honest customers” end up paying for them. The UK’s insurers are committed to reducing the fraud problem, and the ABI is “devoting greater resources to weeding out the cheats, and working together to detect and combat fraud.”
The Insurance Fraud Bureau is already having a significant impact on tackling organized insurance fraud, especially in encouraging “criminal prosecutions” to deter fraud. Starling called for “police forces to be given more resources so that fraud can be treated with the seriousness it deserves”.
Among the more unusual insurance frauds uncovered by the ABI were the following:
— A man who claimed to be unable to walk following an accident was photographed in his local paper collecting an award for leading goal scorer in his local football [soccer] team.
— A bill submitted by a travel insurance policyholder for ‘rehabilitation services’ following an accident suffered while on holiday in West Africa turned out to be for services rendered by a local brothel!
— A woman reported her husband for exaggerating the injuries he received in a car accident hours after he walked out on her after having collected a £385,000 [$768,000] compensation settlement. For three years he had pretended to be crippled.
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