Insurance fraud has reached an estimated £1.9bn a year, costing the average household £44 annually in higher premiums.
A report from the Association of British Insurers revealed on Thursday that around £5.2m of fraudulent claims go undetected every day, a 24 per cent increase compared with two years ago.
It also said that insurance companies are also detecting more fraud, with suspect claims worth £730m rejected last year, 30 per cent more than in 2007. More people than ever before have been caught lying or withholding relevant information in an attempt to get cheaper insurance premiums.
The YouGov survey said as insurers got better at detecting fraudulent claims, people were shifting their focus to the other end of the process and being economic with the truth in order to get cheaper cover.
Popular scams included withholding information about a speeding conviction, listing the wrong address for a motor insurance policy or listing a parent as the main driver of a vehicle that was used most by a newly qualified driver.
The ABI said it had also seen an increase in the number of fraudulent accidental damage claims made on home insurance policies, with people deliberately damaging furnishings or electrical goods so that their insurer would pay for new ones.
Household insurance policies saw the highest level of detected fraudulent claims by volume, while motor insurance ones had the highest level in terms of value, with staged accidents still common.
Gordon Hannah, director claims and operations at esure said: “Left untackled, this type of fraudulent activity will have a knock-on effect of increasing premiums for millions of honest motorists and homeowners across the UK.
“We have found cognitive interviewing to be an effective way of spotting and clamping down on attempted fraud during the claims process. That’s why we are strengthening our team of skilled interviewers to crackdown on claims cheats.
“Call centre agents are also extremely vigilant at the front end when a policy is bought over the phone. Meanwhile, behind the scenes all new policyholder details are run through a shared industry database to detect any mismatch in addresses, credit card details or undisclosed claims.
“Insurance is there to help honest people with genuine claims and we’re doing all we can to crackdown on people who are trying to abuse the insurance system in these difficult economic times.”
The ABI also reported a rise in the number of claims which were dropped by consumers once insurers started asking them for more information.
