The F word in this case is Fraud and Insurance Fraud means that the average premium paid by policyholders is increased by £40 per year, according to a recent report.
With 1 in 11 claims reported to be in some way fraudulent, false claims are costing the insurance industry £4 million a day. And with 11% of adults (or around 5 million people) having committed insurance fraud in the past 12 months, fraud is on the increase according to the Association of British Insurers (ABI).
So who are these 5 million people?
And what can be done to stop them taking money indirectly out of our bank accounts?
Well if you’re a male, aged under 45 and are paying under £500 a year for your insurance whilst living in rented accommodation in the North of England then maybe it’s you as based on the average, the report says that:
- People over 45 are less likely to commit insurance fraud
- If you pay over £500 for your insurance you are 50% less likely to commit insurance fraud
- Homeowners are less likely to commit insurance fraud
- Males are 1.6 times more likely to commit insurance fraud
- If you live in the North of England you are 1.7 time more likely to commit insurance fraud
- If you have unsecured debt over £1,000 you are twice as likely to commit insurance fraud
- If you have a household income of less than £10,000 a year you are 2.6 times more likely to commit insurance fraud
Of the 7,000 people questioned in the ABI survey, 85% of the fraudulent claims involved the exaggeration of the value of a genuine loss with 15% of claims relating to a totally made up loss.
“Insurance fraud means that honest people and businesses throughout the UK are being punished through no fault of their own”, said Mark Burdett, the Marketing Manager for The UK’s Business Insurance Brokers, Northern Counties.
“The cost of insurance fraud is on the increase and I believe the government should be doing more to discourage fraudulent behaviour. Tougher penalties in the form of criminal prosecutions as well as highlighting the seriousness of insurance fraud could both help reduce the number of fraudulent claims and ultimately reduce what we all pay for insurance.”
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