Over 45,000 false car insurance claims were blocked in the UK over the course of 2011 potentially saving drivers £541m - but false insurance claims are still on the rise, new evidence shows.
Dishonest personal motor insurance frauds, of which the majority were difficult-to-disprove whiplash claims, were the second largest area of insurance fraud with 37,000 frauds uncovered, behind home insurance fraud.
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According to the ABI report, 129,000 fake or exaggerated insurance claims were made in 2011, which represents a five per cent increase in 2010 due to a staggering rise in the number of whiplash claims in the UK.
The news will anger UK drivers, who have seen soaring insurance rates in recent years as insurance companies blame fraudulent claims for pushing up premiums. Whiplash injuries, often associated with rear-end shunts or breaking sharply, are incredible difficult to disprove and often rely on the testimony of the injured party.
Otto Thoresen, ABI's Director General says, "The industry makes no apologies for its zero tolerance approach to insurance fraud. Honest customers are sick of footing the bill for insurance cheats, through higher insurance premiums.
"From the highly organised 'crash for cash' motor scams to the opportunistic exaggeration of a genuine claim, insurers are determined to do what it takes to protect honest customers.
"The development of the Insurance Fraud Register marks a milestone in the fight against fraud. It reinforces the strong message that insurance cheats can expect difficulties in obtaining future insurance, credit and other financial products, as well as getting a criminal record."
Over the past 12 months, a number of organised frauds have been discovered in the UK, revealing the lengths some fraudsters will go to in order to collect an insurance payout.
For example, 30 men who hired a coach to take them greyhound racing all claimed whiplash following a staged accident with the car behind, which they had arranged to happen. It was later discovered the group has no intention of going to the racing.
Another incident saw insurers, working with Bedfordshire Police and assisted by the Insurance Fraud Bureau, helped uncover a staged motor accident gang. It was apparently involved in 180 staged and induced accidents, linked to 230 insurance claims, worth £3.2 million. 37 of the gang received prison sentences
The news comes as the insurance industry launches an Insurance Fraud Register, after an ABI report showed that £19million of fraudulent claims are made every week in the UK. The UK insurance industry is the third largest in the world and the largest in Europe.
The Insurance Fraud Register is designed to collect details of all known insurance fraudsters, to help reduce fraud and protect the honest. Its database will help insurers prevent fraud by making details of serial offenders available to them through a secure protocol.
Written by John Meadowcroft