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Survey: One in ten admit to insurance fraud

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by Elaine Frei
Survey: One in ten admit to insurance fraud

A new survey from the Association of British Insurers (ABI) shows that 1 in 10 of 7,000 respondents admit to having committed some degree of insurance fraud. Such false claims, the ABI says, costs insurers £4 million per day and add an average of £40 to each policyholder’s premium.

According to the ABI, which represents nearly 400 companies that write over 91 percent of all UK insurance, about half of the total cost for fraud comes from claims on home contents and building insurance. The survey found that it was very common for policyholders to deliberately spill substances on furniture or carpets or to burn them with cigarettes in order to file a claim. Other common forms of insurance fraud occur when individuals exaggerate the value of personal items lost while on holiday or when they overestimate an injury in a trip and fall accident.

The ABI’s director of general health and insurance emphasized that “honest customers” shouldn’t have to pay for such fraud. His organization is calling for more resources to be given to law enforcement agencies to investigate insurance fraud so that more cheats can be prosecuted in order to discourage others from filing false claims.

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News posted: May 9, 2007

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