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October 19, 2007    

Increase in fraudulent insurance claims

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by Kay Murchie

The Association of British Insurers (ABI), the industry trade body, has revealed that there is a significant increase in fraudulent insurance claims and sincere policyholders are suffering as a consequence with an average £40 being added to premiums.

The ABI added that fighting insurance fraud is costing the industry £1.6 billion a year.

The ABI has declared that one in 11 claims is false, a figure which has trebled since 2003. False household insurance claims, such as damage to carpets make up more than 50% of these claims.

ABI’s director of general insurance and health, Nick Starling, warns that these people are likely to be caught than ever before. Cheats will pay a high price as future insurance and credit will be more expensive and harder to acquire as a result.

Further statistics from the ABI show that at least a quarter of car insurance claims in London are thought to be false.

The ABI said that those making false claims see it as acceptable as the industry is making so much money that it’s of no significance. However, such an approach is dangerous and ABI concluded that the industry is fighting back.

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