Car insurance fraud 'costing the industry'

Insurance fraud causes £2 billion to be lost each year in the UK, it has been reported.

According to the Annual Fraud Indicator published by the National Fraud Authority, the total national fraud bill is £30 billion per year.

Commenting on the report, Steve Foulsham, technical services manager at the British Insurance Brokers' Association, said a more joined-up approach is required to tackle fraud.

"Where we come from, in the broking sector, we would like to see more communication between the broking community and insurers," he stated.

Combating the situation requires co-operative action across parties, Mr Foulsham stated.

"If an insurer suspects fraud, the broker will know the client better, because they are closer – and can disclose this to the insurer to make sure that the outcome is the right one," he added.

Nick Starling, the Association of British Insurer's director of general insurance, said dishonest insurance claims alone cost around £2 billion year, which adds on average an extra £44 a year to every household's general budget.

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2010-01-25 13:20:33 © Moneyextra.com