£480 million fake insurance claims annually

False insurance claims to the value of over £1 million are being uncovered every day, according to new research from the Association of British insurers (ABI).

Some £1.3 million worth of fake claims are discovered everyday by the ABI, totalling more than £480 million annually - more than three times the level found in 2003.

One in 11 claims in fraudulent in some way, almost one million in total - of which 85 per cent involved exaggerating the value of items which have been genuinely lost.

"Fraudulent insurance claims cost £1.6 billion, and add £40 a year to the premiums paid by honest customers," commented Nick Starling, director of general insurance and health at the ABI.

"But the industry is fighting back.

"Insurance cheats are more likely to be caught than ever before. And cheats will pay a high price as future insurance and credit will be more expensive and harder to obtain."

One case faced by insurers involved a man who pushed his own car off a cliff allowing him to claim it had been stolen, while another man was reported by his wife hours after he left her with a £325,000 payout he received for exaggerating injuries he received in a car crash.