UK Homeowners Insurance is Biggest Fraud Target; $3.55 Million a Day

Home insurance is now the number one target for insurance fraudsters according to the hundreds of fraudulent insurance claims exposed every day, according to the Association of British Insurers (ABI).

To back up is assertion the ABI released the following figures:
• Every day insurers detect 335 fraudulent insurance claims worth £2.3 million [$3.554 million].
• Dishonest home insurance claims are the most common: 170 cheating householders are caught out each day. Typically these involve alleged accidental damage to carpets and furniture due to spilled drink, which were in fact caused deliberately.
• Fraudulent motor [automobile] claims are the most costly. 108 bogus motor insurance claims worth £1.12 million [$1.73 million] are exposed each day.

The ABI also gave some interesting examples of the types of fraudulent claims its members have dealt with, as follows:
• A policyholder claimed on his household policy for the theft of DVDs that he said had been bought locally, despite the fact that they had yet to be released in the UK.
• A policyholder who took his car to participate in a race day at the Nurburgring race track in Germany. He crashed the vehicle causing extensive damage, which he then shipped back to the UK and left alongside a road where it was claimed the damage had taken place.
• A man claimed for head injuries allegedly as a result of falling over a loose paving stone, which were in fact sustained after being hit by a baseball bat during a fight.

Nick Starling, the ABI’s Director of General Insurance and Health, commented: “Insurance cheats do not prosper – they can expect to get caught, face problems getting future insurance and risk getting a criminal record. The majority of customers are honest and rightly object to subsidizing the cheats. Insurance fraud adds an extra £44 [$68.00] to the average UK household’s annual insurance bill. This is why 2011 will see insurers intensify their war against the cheats, to protect their honest customers.”

In the five years since the ABI has been collecting data on insurance fraud, many bizarre bogus claims have come to light including the following:
• A woman reported her husband for exaggerating injuries received in a car accident after he walked out on her having collected £385,000 [$594,937], compensation. For three years he had pretended to be crippled.
• A man, who claimed to be unable to walk, following an accident, was photographed in his local newspaper collecting an award for the leading goal scorer in his local football [soccer] team.
• A car owner claimed his car had been stolen. However, he had in fact pushed it over a cliff and planned to use the insurance payout to meet his outstanding HP [hire/purchase, i.e. lease] repayments on the vehicle.

Source: Association of British Insurers