Cifas reports 'alarming' rise in false insurance claims

False insurance claims increased by more than a quarter last year, according to new data.

UK fraud prevention service Cifas revealed that fraudulent claims rose by 27% in 2018, with the figure increasing to 52% and 45% for household and motor insurance respectively.

Claimants aged 31-40 made the most false home insurance claims last year, while 21-30 year-olds made the most false claims for motor insurance.

There was an overall decrease in another form of insurance fraud, fronting - when a driver claims they are the main user of a vehicle that is actually driven by a young driver or other high-risk motorist in order to lower the premium.

However, the data showed an 18% increase in the proportion of 21-30 year-olds engaging in this type of fraudulent activity.

Describing the statistics as "alarming", Cifas urged people to consider the consequences of making false insurance claims or fronting insurance policies - which can be far more serious than many imagine.

Consequences can include non-payment of claims; cancellation of the insurance policy; individuals having to pay costs that arise from an accident; and a record with Cifas and the Insurance Fraud Register, making it more difficult to obtain insurance and other financial services.

The matter could also be reported to the police for investigation - potentially leading to a criminal conviction and a prison sentence.

"The idea that fraud is a victimless crime is completely false," commented Cifas chief executive Mike Haley. "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."

Haley added: "As the rise of false claims in household and motor insurance shows, many people are seemingly unaware of the risks they're running and the consequences it can have by committing everyday fraud."