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UK fraud cases on rise

UK insurers are detecting more than 2000 fraudulent claims every week as dishonest home and car claims drive the cost of insurance up by £840 million ($1.5 billion).

New figures released by the Association of British Insurers (ABI) revealed a 14% rise in both the value and number of fraudulent claims in 2009, although it remains unclear if fraud is increasing or if insurers are becoming savvier detectors.

UK insurers detected about 2300 fraudulent claims each week last year, amounting to 122,000 in total. Motor insurance fraud comprised £410 million ($707 million) of the total, while roughly half the number of claims related to home insurance.

Fraudulent claims unearthed by insurers include a man who sustained a fractured hand after he punched a wall during a domestic dispute. He told his insurer he had fallen over a pothole in the street.

“Reducing fraud remains an ongoing battle for the insurance industry,” ABI Director of General Insurance and Health Nick Starling said.

“Our honest customers rightly object to having to pay higher premiums to subsidise the fraudulent minority, which is why insurers continue to up their game in the war on the cheats.”