Insurers are cracking down on invalid claims in a move that could save us up to £40 a year in premium costs.
After a recent report that found almost one in every eleven UK insurance claims to be in some way fraudulent, the Association of British Insurers (ABI) are cracking down on invalid claims.
ABI Director, Nick Starling, reported that fraudulent claims are costing the insurance industry a massive £1.6 billion a year, a figure that adds an average of £40 a year to the premium cost of 'honest customers', again an example of the dishonesty of some being paid for by the rest of us.
Surprisingly, the vast majority of these claims aren't the highly involved scams you'd imagine but instead exaggerations of genuine insurance claims. While this may seem innocent enough it bumps up the cost of compensation for the insurer by an estimated £800 million a year; an amount that is then passed on to the public and covered by increases in premiums.
Interestingly, the ABI report that over 50% of the dishonest claims unearthed were on home insurance policies with incidences of people "accidentally damaging" property so they could claim for a replacement being most common and widespread.
Thankfully the insurance industry has started to tighten the loop on this type of crime and it's estimated that dishonest claims valued over £480 million have been prevented this year alone.
To increase this figure further the ABI are working with the UK police to ensure that an ever increasing number of fraudulent claims are uncovered and prosecuted. This is a move that will only help to make insurance more affordable for those who play by the rules in the future.
