It seems that the recession has driven people to desperate measures in order to get some extra cash in.

Figures have been gradually on the rise for the last four years, but around 107,000 false claims were filed in the last year claiming a total of £730 million according to the Association of British Insurers (ABI). This is up 30% on the year before.

The ABI claims that fraud is “more of a temptation” during a recession. This is shown to be likely as one motorist went so far as to push his car over a cliff in order to claim insurance on it.

The detection of fraud has risen, but the ABI still believes that the actual number of fraudulent claims in the home and motor insurance areas has also increased.

Fraudulent house insurance claims for either false or exaggerated claims is thought to have risen to around 55,000 people in the last year.

However, fake claims on motor insurance are thought to be at their highest value of £360 million worth. This includes a man that claimed his car had been stolen from a car park but later admitted pushing it off a cliff in order to use the insurance money to clear his debts.

Recession Making People Desperate?

One person holidaying in West Africa, went so far as to claim “recovery expenses”. This was however declined when it was found that some of these expenses included services at a local brothel.

Nick Starling, the director of insurance at the ABI said: “Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats.

“Fraud adds an extra £40 a year to the average premium, which is why the harder we make it for cheats, the more competitive premiums will be for honest customers.”

According to the ABI’s figures, in 2004, the amount of fraudulent claims would have cost £260 million in total, in 2005 this rose to £410 million, rising again to £470 million in 2006. In 2007 the figure stood around £560 million.

Norwich Union fraud investigator Sue Cowes says however that the majority of insurance claims are genuine. She is still on the lookout for suspicious remarks, how many claims the customers have previously and how long ago the policy was taken out.

She did admit that people were telling half-truths however, saying that: “unfortunately people are exaggerating some types of claims.”

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