The Association of British Insurers believes that the recession caused a large increase in the amount of fraudulent insurance claims last year, with home insurance accounting for more than half of the total.
False home insurance claims contributed to more than half of the fraudulent claims detected by the Association of British Insurers (ABI) last year.
The organisation recorded 107,000 fake or exaggerated claims in total, with 55,000 of these related to home cover. The overall number of claims was 17 percent up on 2007, with the total value reaching £730 million - up 30 percent from 2007.
According to the ABI, the recession has tempted people to attempt to cheat their insurance provider. In 2007 three percent of all claims by value - apart from life insurance - were fraudulent, while this rose to 2008, the year the worldwide financial crisis intensified.
The ABI cited a separate study, carried out by YouGov, which showed that one in five adults would "not rule out" making a fraudulent claim at some point - which the ABI strongly advised against. Director of general insurance and health Nick Starling explained: "Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats."
According to Mr Starling, fraud adds £40 a year to the average insurance premium, meaning it is not only cover providers who are out of pocket as a result of the crime.
"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," he added. "The only thing you are likely to gain is a criminal record."
