Value of insurance scams on the rise | HK Wealth

Value of insurance scams on the rise

Fraud is now the most commonly reported crime in England and Wales – and insurance fraud in particular is a growing problem.

According to the latest figures from the Association of British Insurers (ABI), the total number of fraudulent insurance claims detected actually fell by almost a fifth last year to 72,600.Value of insurance scams on the rise

But the value of the average scam increased over the same period, rising by 20 per cent to £15,000.

Many factors will be behind this upswing, most notably high inflation pushing up costs across the board.

But a closer look at the figures shows other reasons. For instance, the value of property insurance frauds rose by eight per cent in 2022 to £134 million, while motor insurance fraud continued to be widespread, accounting for 59 per cent of cases seen last year.

In the current financial climate, it’s perhaps no surprise that some hard-pressed consumers would be tempted to exaggerate the size of their insurance claims.

However, a 20 per cent increase in the value of the average scam in just a single year shows something else. As the ABI notes, some fraudsters are “aiming big”.

Insurance fraud is not a victimless crime, as it can lead to cover providers being forced to charge higher insurance premiums for honest customers.

And law-abiding citizens want insurance firms to identify and weed out fraudsters so they can concentrate on handling genuine claims instead.

How do you protect yourself from insurance fraud?

It’s really important that you’re on the lookout for potential scams, or the consequences can be extremely costly.

“The golden rule is never act in haste,” says Mark Allen, the ABI’s Assistant Director, Head of Fraud and Financial Crime.

“If a deal appears too good to be true, then it probably is.”

One step you can take to protect yourself is to choose a well-established and reputable insurance company, which has plenty of customer feedback and reviews online to prove their credibility.

You can then be confident that you’re dealing with a legitimate organisation, rather than a scammer.

Another important measure you can take is to safeguard your personal information, to lessen the chance of a fraudster trying to steal your identity.

Be cautious about what information you share online and shred sensitive documents that contain your name, address and other personal details, so scammers can’t make fraudulent applications in your name.

And of course, if you see anything that you think is suspicious, let your insurance company know about it, and the police if necessary.

If the authorities and the insurance industry are made aware of specific instances of fraud, they’ll be able to do what’s necessary to bring them to justice, and perhaps deter others from committing similar crimes.

Staying safe in the face of financial scams is really important if you’re going to be able to make your money work hard for you, so you can achieve your financial goals.

So be vigilant and don’t let your emotions guide your decisions


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Garry Hale
Garry Hale
MD & Certified Financial Planner

A brief meeting might be of interest, especially if you’re unsure just how wealth management and financial planning could help you.

It would only require the investment of an hour or so of your time, and the coffee’s not bad either.