Bogus insurance claims spike as people turn every stone looking for cash

Policyholders are getting caught out quickly as insurers become savvy to the rise in fake claims

Fake insurance claims have surged by more than a quarter as desperate households risk a criminal record in a bid for extra cash amid the cost of living crisis, new figures show.

Insurance fraudsters have claimed an average of £8,800 each and most commonly lied about jewellery, mobile phones and TVs being damaged or stolen, according to insurer Zurich.

It reported a 27pc increase in fraud so far this year after it foiled £4.2m worth of fraudulent claims, compared with £3.3m in the same period last year. 

One insurance fraudster claiming £500 was caught after blaming his smashed TV on his daughter’s “before school tantrum”, despite initially claiming it happened on a Sunday.

In another case a poker player claimed his £110,000 watch had disappeared from his bag, just months after doubling the value it was insured for. He later insisted the piece had “reappeared” in the same bag once Zurich’s investigators probed the claim.

Scott Clayton of the company said there had been a “significant rise” in bogus claims since the beginning of the year as households came under increased financial strain.

Mr Clayton said: “Sadly, many more people are facing hardships as a result of the cost of living crisis, which is contributing to an increase in fraudulent claims.  

“The consequences can be severe and fraudsters face criminal prosecution and potentially even a prison sentence. At the very least, offenders can expect to find it harder to obtain cover in the future.”

Zurich discovered one woman was lying about a £1,000 claim for a stolen bike, which she made just half an hour after buying the policy. Mobile phone footage later revealed the thief stealing the bike 45 minutes before she bought the cover.

Detective Chief Inspector Tom Hill, from the City of London Police, said: “Submitting a bogus insurance claim may seem like a victimless crime, but it in fact drives up the cost of premiums for everyone.

“Exaggerating or fabricating a claim for a pricey watch or television may seem like a quick way to make money, but a conviction will have a lasting impact on your life.”

Rampant inflation, soaring energy bills and tax rises have driven ordinary people to extreme methods of supplementing their incomes since the end of last year.

Insurer LV reported fake claims more than doubled in the last three months of 2021, with so-called “pre-inception losses” – where someone damages or loses an uninsured item but takes out a policy and lies about dates – were up 156pc on the previous quarter. 

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