Insurance fraud is on the rise in England and Wales, with the average scam value increasing by 20%. Discover the reasons behind this surge and learn how to protect yourself from falling victim to insurance scams.
Fraud has become the most frequently reported crime in England and Wales, and insurance fraud is a mounting concern. According to the latest data from the Association of British Insurers (ABI), while the number of detected fraudulent insurance claims decreased by nearly 20% last year to 72,600, the average scam’s value surged by 20% to £15,000.
Several factors contribute to this upward trend, including the impact of high inflation on overall costs. However, a closer examination of the statistics reveals more nuances. Property insurance frauds, for instance, rose by 8% in 2022 to a staggering £134 million, while motor insurance fraud remained widespread, constituting 59% of all cases.
In the current economic climate, it’s unsurprising that some financially strained individuals might be tempted to exaggerate their insurance claims. However, the 20% increase in average scam value within a single year suggests a concerning trend: some fraudsters are “aiming big.”
Insurance fraud is far from a victimless crime; it forces insurers to raise premiums for honest policyholders. Law-abiding citizens expect insurance companies to identify and eliminate fraudsters so they can focus on processing genuine claims.
Protecting Yourself from Insurance Fraud
Vigilance is crucial to avoiding costly insurance scams. “The golden rule is never act in haste,” advises Mark Allen, ABI’s Assistant Director, Head of Fraud and Financial Crime. “If a deal appears too good to be true, then it probably is.”
To safeguard yourself, opt for a well-established and reputable insurance company with a track record backed by customer feedback and online reviews.
Protect your personal information to reduce the risk of identity theft. Exercise caution regarding online information sharing and shred sensitive documents containing personal details.
If you encounter suspicious activity, report it to your insurance company and, if necessary, to the police. Authorities and the insurance industry rely on such reports to take action against fraudsters and deter future criminal activity.
Staying financially secure requires vigilance in the face of scams. Emotions should not guide your decisions; instead, focus on safeguarding your assets and financial goals.