Fraudulent Insurance Claims on the Rise

15/05/2009

The recession caused a rising number of fraudulent insurance claims last year.

Insurance fraud has existed ever since the birth of insurance companies but a recent report has revealed an increase of false or exaggerated claims.

Last year, more than 100,000 fraudulent claims were made- which represents a rise of 17% in comparison to 2007.

So why is this figure rising ?

The finger has been heavily pointed at the recession as more and more home owners make fake claims on their insurance.

An other survey carried out by YouGov for the ABI (the Association of British Insurers) has also shown that one in five people would not hesitate to make a fraudulent insurance claim in the future and in their minds they don't consider this to be an offence.

More and more people do not consider false insurance claims as a dishonest act- which makes the problem more complicated to solve.

The most common type of fraudulent claims concern home insurance claims, with 55,000 phony home insurance claims were detected in 2008.

High rates of health care and vehicle insurance frauds are also recorded each year.

An example of false insurance claim could be when somebody wants to change their old big TV and so drops it down the stairs in order to then make a claim for having a brand-new flat screen.

But according to the ABI's Director of General Insurance - Nick Starling - making fraudulent claim on your insurance is not a solution and in fact brings other problems- like giving you a criminal record.

The Association of British Insurers has reported some incredible anecdotes about dishonest claims- like when a policyholder claimed his car has been stolen following an attack whereas actually he had sold it to a friend.

Unfortunatly, there is not a real solution for this issue and people will continue to make exaggerated claims on their insurance. However to reduce risks of fraud, insurers have had to intensifying their crackdown on insurance cheats.