Car Insurance Fraud 'Costs £260m a Year'

Around £5 million worth of car insurance fraud is committed each week in the UK, providers have claimed.

The Association of British Insurers (ABI) released a fraud report today, which said that the firms expose around 24,000 bogus claims worth around £260 million every year. Moreover, this rate was found to have increased by 70 per cent since 2005.

In order to fully highlight the extent of the car insurance fraud problem in Britain, the ABI also released several "case studies" of typical false claims. For example, one insurer had a claim submitted from a policyholder who said that she damaged her Land Rover when her foot slipped off the brake. The firm later found that the damage was caused after the woman had argued with her partner.

A further case concerned a Rolls-Royce driver who claimed that several of his car's parts, including the famous Spirit of Ecstasy emblem, had been stolen. Around £10,000 worth of the parts were later recovered from his home by police.

Nick Starling, the ABI's director of general insurance and health, said: "Insurance fraud is no victimless crime. Honest motorists pay through higher insurance premiums - an extra £40 a year on average. This is why insurers are ramping up their crackdown to weed out the cheats.

"Anyone committing insurance fraud is more likely to get caught, risks a criminal record, and will find future insurance and credit harder to obtain and more expensive."