New report highlights big increase in false insurance claims in UK

Posted Apr 25, 2019.
A new report from Cifas, the UK’s not-for-profit fraud prevention membership organisation, has highlighted a big increase in false and fraudulent insurance claims across the UK during the previous 12 months. Whilst the overall national increase is 27%, the biggest rise in false claims comes from motor insurance at 45%, and house insurance at a whopping 52%. 

Whilst the increase in claims may be attributable to a variety of economic and social factors, it is clear that making a false insurance claim is often seen as a ‘victimless crime’, and as an easy way of making a bit of extra money. The big increase in false house insurance claims is likely to be due to the fact that claims for storm damage, water and accidental damage and burglary are the easiest to fake, despite advances among insurance companies in identifying such fraud. 

Cifas CEO Mike Haley commented:

“False insurance claim fraud and fronting insurance policies fraud are often seen as an easy way to make a bit of extra money…yet the idea that fraud is a victimless crime is completely false. First, false insurance claims and fronting insurance policies are illegal. They can impact your life and career, making it near-impossible to buy insurance in the future and can even lead to a criminal record. 'Second, committing fraud hurts everyone: your neighbours, your friends, people in the area, and the UK as a whole…insurers have to spend longer reviewing insurance claims and policy requests, premiums go up, and everyone loses out.”

New insurance fraud campaign

The report is part of Cifas’ new ‘faces of fraud’ campaign, designed to raise awareness among consumers of how damaging – and illegal – many seemingly innocent acts involving false claims can be. In particular, the campaign focuses on the consequences of insurance fraud, which are usually far more serious than many believe. Apart from potential criminal punishment in the form of fines, criminal records and even custodial sentences for the worst cases, other major downsides include non- payment of claims and subsequent insurance being much harder and more expensive to obtain.

One area of insurance fraud that has shown an overall decrease but that is still a big concern is ‘fronting’, where an older / more experienced driver of a car claims that they are the main user (typically a parent), whilst the actual main driver is one who is younger and less experienced (typically a child of the parent).  A spokesperson for AA insurance added:

“Not only are false insurance claims and fronting insurance policies are illegal but it also means that your insurance is not valid – hence if you write-off your car or suffer serious injuries you are unlikely to be covered. 'So as well as a potential criminal record it could also cost you a fortune. The high cost of motor insurance for younger drivers means families can be lured into fronting. 'To reduce the number of illegal motor insurance policies, we continue to ask the Government to remove Insurance Premium Tax for newly qualified drivers who take out a telematics "black box" insurance policy for their first two years behind the wheel.”


Professional help with Insurance Disputes

Are you being accused of making a fraudulent or false claim when in fact your claim is perfectly valid? At Bakers Solicitors, disputed insurance claim cases are dealt with on a no win, no fee basis. There is no upfront or unexpected costs, so if you feel you have been treated unfairly by an insurance company please contact us today for friendly and professional assistance. You can contact us by email, arrange a free consultation online or ring us on FREE on 0800 731 7284.