Car insurance scams push fraud to record level
'Crash for cash' scams helped push insurance fraud to a record £1.3 billion last year.
Insurers detected 118,500 bogus or exaggerated insurances claims in 2013, the equivalent of 2,279 cases a week, the Association of British Insurers (ABI) reported.
The majority - 59,900 - were fake car claims worth £811 million, which was a rise of 34% on the previous year.
The ABI said fraud costs each household in the UK an extra £50 a year in increased premiums and the £1.3 billion total is an 18% rise on the 2013 figures.
The Insurance Fraud Bureau is currently investigating 110 'crash for cash' scams throughout the UK.
'Crash for cash' happens when a driver slams on their brakes without warning, forcing the driver behind to crash into them. The fraudster then attempts to claim back money through their insurance.
According to the ABI, 60 people, including seven members of the same family, were convicted of a crash for cash scam that involved trying to claim more than £514,000 from 25 vehicle crashes.
And in another example, a professional golfer who claimed £8,000 on his income protection policy for a knee injury was subsequently filmed giving lessons. He was ordered to do 140 hours of unpaid community service.
Meanwhile, there were 35,000 cases of home insurance fraud in 2013, worth £137 million.
Aidan Kerr, the ABI's assistant director, head of fraud, said: "The more that is done to crackdown on the dishonest, the quicker and more effectively insurers can deal with the claims from the honest majority.
"The message is clear: never has it been harder to get away with committing insurance fraud; never have the penalties - ranging from a custodial sentence and a criminal record to difficulties in obtaining financial products in the future - been so severe."
Association of British Insurers
Established in 1985, the ABI is the trade body for UK insurance companies. It has more than 400 member companies that provide around 90% of domestic insurance services sold in the UK. The ABI speaks out on issues of common interest and acts as an advocate for high standards of customer service in the insurance industry. The ABI is funded by the subscriptions of member companies.