Car Insurance

Insurance fraud is costing each household an average £650 a year. Car insurance fraud is costing the industry billions of pounds each year, which is being pushing back onto the consumer, new reports suggest. Levels of fraud over all kinds of insurance have doubled in the past five years, meaning insurance firms are raising premiums to keep up profit margins, resulting in an average £650 extra cost per household annually. Staged motor accidents are being blamed for a large chunk of the fraud, claims the Association of British Insurers (ABI), ahead of the publication of the government's recommendations for tackling fraud in the summer. "The extent of fraud is under-estimated,

and its detection under-resourced. Yet its impact is very real and serious. It has become as big a money earner for criminal gangs as drugs," said the ABI's director general Nick Starling. "And with the emergence of staged motor accidents, increasingly the public are at risk," he added. Motorists searching for a cheap car insurance quote are likely to find it increasingly difficult as premiums continue to rise as car insurance firms pass on the cost of fraudulent claims. In its own recommendations, the ABI called for the introduction of a national strategy to combat fraud. "We need a national fraud strategy based on greater prioritisation for police and [the] Crown Prosecution Service to reinforce action being taken by the insurance industry to reduce the problem," said Mr Starling.