Insurance fraud thrives during recession

18 May 2009 people are desperate enough for money, they will sometimes turn to insurance fraud as a way to get money because to them, insurance fraud seems victimless. After all, what's a £5,000 claim for a giant insurance company, right? Nope. It affects everyone who buys insurance due to increased premiums.

How much has insurance fraud gone up?
In 2008, 4% of all insurance claims were found to be fraudulent, up from 3% in 2007 . The number is expected to rise in 2009 as the recession deepens.

How much does insurance fraud cost the industry, and, more importantly, me?
In 2007, fraudulent insurance claims totaled £730 million a year . Other sources estimate that the figure is more like £1.6 billion a year. Insurance fraud adds around £40 to everyone's premium.

How does organized insurance fraud work?
Organised insurance fraudsters will sometimes deliberately cause car accidents where an innocent driver is forced to crash into the back of the fraud criminal's car. The organized fraud group makes claims against the innocent driver, often for made-up injuries on people who weren't even at the scene of the crash. Some of these insurance fraud rings have claims with many insurers at the same time.

What kind of individual fraud cases show up more during recessions?
Sometimes people will torch their car and claim it was stolen in order to collect insurance money. Others will "lose" expensive jewellery that is covered in a homeowners policy, or claim that an injury suffered during recreation (playing rugby for instance) was caused by a hole in the pavement. Insurance fraud having to do with automobiles is the most costly, accounting for £360 million a year.

Why should I report suspected insurance fraud?
Well, for one thing, insurance fraud is a felony. For another, it costs you, me, and everyone else in terms of higher premiums. You can report suspected insurance fraud anonymously to the Insurance Fraud Cheatline of the Insurance Fraud Bureau.

TOPICS:   Insurance   Scams


  • Song B.
    "For another, it costs you, me, and everyone else in terms of higher premiums." As do legit claims, perhaps we should shop others for making legit claims too, as they are 'bumping up our premiums'? How about understanding that the higher premiuims excuse is one made up by insurance companies taking a crap gamble by issuing policies to high risks and trying to make up for it by making you and I believe they we must foot the bill for the bad guys. In actual fact we pay not only for our cover but to cover the insurance companies crap bets for dodgy and legit claims. /rant over
  • Bernard B.
    All insurance companies are cnuts.
  • Mr C.
    Yo vince have you moved to the US ??: Well, for one thing, insurance fraud is a 'felony' ???
  • Ali
    I work for a company who design insurance software and I can tell you its the companies who are committing the fraud, every single premium they give has a 30% - 50% markup so no matter what price you pay they still get paid Son's Of Bitches!!!
  • Tom P.
    @ Mr Cooper, "insurance fraud is a ‘felony’", usual plagiarist cheap ass cut/paste from BW editors.
  • James R.
    Insurance companies provide valued peace of mind and in tough times that means we can rip them off and pay the rent
  • Radio O.
    I could have sworn this was big news on radio 1 newsbeat about 3weeks ago... have i gone back in time??
  • Swansea R.
    my neighbour should be on insurance blacklist - he claims all the time for alleged accidents thefts etc latest is a RTC which was his fault for injury -bloody nothing wrong with him.
  • Mike H.
    The doctors don't help matters with injury claims, they'll just put down anything you want them to even though there's fuck all up with you, they're the really cun... culpritts
  • Paul S.
    @Tom or maybe, just maybe Vince has spent more than a few years living in America?
  • James
    articles like this make me laugh, cuz they are all in very good faith but they give fraudsters more ideas lol
  • affiliatemasterprogramweb
    May I know more about how to put your site as part of my rss reader? =)

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