Monday 21st May 2007
Fraud on general policies such as motor and home insurance costs the UK economy some £1.6 billion each year, according to the Association of British Insurers (ABI).
Statistics released by the ABI show that about £4 million of fraudulent claims are made every day in the UK, with up to ten per cent of consumers admitting to having cheated on their policies.
More than half of this was found to be opportunistic, with over £800 million of claims made on the spur of the moment.
Nick Starling, director of general insurance and health at the ABI, said: "Honest customers should not have pay for the cheats. Insurers are committed to reducing the fraud problem."
He called for stronger punishment for insurance fraudsters, stating: "These figures highlight that greater deterrents, such as criminal prosecutions, are needed to discourage fraud."
The ABI calculated that insurance fraud may be blamed for a rise in policy costs of about £40 per year, with the largest amount of fraud committed against home insurance policies.
Claims against contents insurance and building insurance policies were said by the association to account for about half of all those identified as fraudulent.
Meanwhile, Post Office recently advised homeowners they may be paying over the odds for their home insurance by obtaining policies from their mortgage provider.
Head of insurance Phil Ashkuri said: "Many homeowners dont realise taking out buildings and contents insurance with their mortgage lender is generally not the best value deal."
He added that it is usually not compulsory to take the lenders insurance cover in order to secure a mortgage.
"Our advice is shop around as there are better home insurance deals out there from standalone providers," he added.
Figures published by the financial services firm showed that about two-thirds of people (62 per cent) could save £90 by switching to a Post Office insurance policy.
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