Yet one in five people said they would still be tempted to cheat on their insurance, despite the likelihood of being caught, facing trouble in obtaining financial products in the future, and getting a criminal record.
ABI figures show that in 2008:
* 107,000 fraudulent insurance claims were exposed, a rise of 17% on 2007. The value of these claims, at £730million, rose by 30% on the previous year;
* Dishonest claims on home insurance were most common, with 55,000 false or exaggerated claims detected. By value, fraudulent motor insurance claims were the highest, with £360million saved;
* 4% of all claims by value (excluding life insurance) were fraudulent, compared to 3% in 2007.
In a separate survey of 3000 adults carried out for the ABI by YouGov, one in five people admitted that they would not rule out making a fraudulent claim in the future.
Nick Starling, the ABI’s Director of General Insurance and Health, said: "Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats. Fraud adds an extra £40 a year to the average premium, which is why the harder we make it for the cheats, the more competitive premiums will be for honest customers.
"Cheating on your insurance really does not pay – you will get caught, future insurance will be more expensive and, along with credit, harder to obtain. The only thing you are likely to gain is a criminal record."
Insurance cheats caught out in this crackdown include:
* A policyholder who claimed that his car had been stolen following a mugging. Investigations revealed that he had actually sold the car to a friend;
* A car was reported stolen and recovered burnt out. However it transpired that the vehicle had been set alight before the policyholder reported that it stolen. The policyholder received a criminal conviction;
* A woman claimed for a lost engagement ring, and was told that her policy did not cover her outside of the home. So she extended the cover, and the next day claimed for the loss of the same ring.
* A customer’s coal fire exploded, showering her living room carpet with coal, but causing no damage. Several weeks later she claimed under her household policy for a large burn mark on her carpet, which it is alleged was caused by the explosion. However the burn was under her sofa. When asked to explain how a large ball of flame travelled past her and lodged under the sofa, the claim was withdrawn.
* A claim for replacing a lounge suite following accidental spillage of paint was rejected when forensic tests showed that the paint had been deliberately applied.
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