Average insurance scam is now £15,000 – pushing up the cost of car, home and travel cover

The average insurance fraud is now worth £15,000 – pushing up premiums for honest drivers, homeowners and holidaymakers.

Unsuspecting consumers are also having their identities stolen by fraudsters making fake claims, and innocent drivers are falling victim to buying fake insurance from so-called ‘ghost brokers’.

The number of insurance frauds detected fell 19 per cent in 2022 compared to 2021, to 72,600 cases – or 198 a day, according to the Association of British Insurers.

But the average value of this fraud was £1.1billion, just 4 per cent less than 2021, as each scam was worth £15,000 on average – a 20 per cent increase. 

Another estimated £1billion of insurance fraud goes undetected every year, with fraud now the most common crime in the UK.

The average home insurance policy costs £315 a year, of which around £50 covers the cost of fraud.

Meanwhile car insurance premiums have hit a record high of £511 a year for the typical driver, of which around £50 pays for fraudulent claims. 

One 2022 scammer was jailed for 16 months for making 15 bogus travel insurance claims valued at £75,000, using the identities of people he knew.

Another fraudster pocketed £50,000 by acting as an illegal insurance intermediary, known as a ghost broker, and selling fake motor insurance.

An employee at a veterinary practice was caught claiming over £37,000 in fraudulent pet insurance claims. 

The woman took out pet insurance policies with six insurers and made a total of 18 fraudulent claims against them over four years. 

She altered invoices for medical treatment that the practice had sent to genuine clients, so that they appeared to have been issued to her, and then submitted them to the insurers as ‘evidence’ of her claims.

ABI assistant director, head of fraud and financial crime Mark Allen said: ‘Fraud is now the most reported crime in England and Wales. These latest figures highlight that some fraudsters are aiming big, with some large frauds uncovered. 

‘It is also important that consumers remain vigilant to potential scams. The golden rule is never act in haste – if a deal appears too good to be true, then it probably is. 

‘If you suspect a fraud has been committed, you can report it confidentially to the Insurance Fraud Bureau’s CheatLine on 0800 422 0421.’

Detective Chief Inspector Tom Hill, from the City of London Police’s Insurance Fraud Enforcement Department, said: ‘Insurance fraud is never simply taking money from a company that can afford it. 

‘Many victims of insurance fraud are members of the public, from people who have their identities stolen to help facilitate fraud, to people who have unknowingly bought fake motor insurance from ghost brokers.’