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Crunch sees dodgy insurance claims soar.

Summary: The number of dodgy insurance claims has soared confirming fraud "thrives" during an economic downturn, new figures have shown.

The number of dodgy insurance claims has soared confirming fraud "thrives" during an economic downturn, new figures have shown.

The Association of British Insurers (ABI) said a total of 107,200 claims worth Au730 million were found to be false in 2008 while the number of claims was up 17 per cent, with their value soaring more than 30 per cent compared to 2007's sum of Au560 million.

One motorist reported his car as stolen but later admitted he had pushed it over a cliff. The claimant planned to use the payout to clear debts.

The ABI said a woman claimed for a lost engagement ring the day after she extended her home insurance to include items lost outside her home.

And a man on holiday in West Africa claimed for "recovery expenses". This was turned down as it included services at a local brothel.

A survey carried out for the trade body also found that a fifth of people would not rule out making a fraudulent claim in the future.

Dodgy claims were most common in the home insurance sector, with 55,000 false or exaggerated applications detected last year worth a total of Au110 million.

Meanwhile, fraudulent motor insurance claims were the highest by value last year, worth Au360 million and numbering 35,300.

ABI director Nick Starling said: "Fraud thrives in a recession, so insurers are intensifying their crackdown on insurance cheats.

"Fraud adds an extra Au40 a year to the average premium, which is why the harder we make it for the cheats, the more competitive premiums will be for honest customers."

Fraudulent claims totalled Au260 million in 2004 when the ABI first collated figures, rising to Au410 million the following year and Au470 million in 2006.

Independent Television News Limited 2009. All rights reserved.

Independent Television News Limited 2009. All rights reserved.

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Publication:Independent Television News Limited (ITN)
Date:Apr 20, 2009
Words:335
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