You're stealing from insurers!

Dodgy home insurance claims cost us £246m, and bump up our premiums.

When it comes to insurance fraud, I'm something of an expert. Don't worry, I'm not a fraudster!

The truth is that I spent many years working for insurance companies in legal and marketing roles, helping to detect and stamp out exaggerated, bogus and false claims.

One thing I learnt is that insurance fraud tends to rise during recessions and economic downturns. This was certainly the case in the slowdown of the early Nineties, when my employer saw a huge increase in the number of dodgy and hoax claims.

Hence, following the global financial crisis of 2007-9, insurance fraud has been rising. This is one reason why car insurance premiums have soared by 40% in the past 12 months!

A £246 million fraud

What's more, exaggerated and fraudulent home insurance claims are on the increase, according to the latest fraud data from AXA UK.

AXA claims that exaggerated and dishonest claims bump up the cost of home insurance by £246 million a year. In effect, these cheating claimants add £13 a year to the cost of home insurance for a typical household.

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And the insurer reports seeing 'a rising trend' of exaggerated claims and fraudulent behaviour - in March, it interviewed 56 insurance brokers and found that one in three had seen an increase in exaggerated claims over the past year.

Also, consumer research carried out by pollsters OnePoll in February found that around 8% of claimants have added an average of nearly £2,900 on top of their genuine losses.

Who are the cheats?

AXA's research revealed than more than one in three of us (36%) would be 'likely' or 'very likely' to consider exaggerating a claim. Also, nearly half of Brits (47%) believe that 'telling a few white lies' when making insurance claims is either 'fair game' or, at worst, 'not too bad'.

AXA found that men are far more likely to exaggerate claims than women, and the amount by which men exaggerate claims is nearly twice the sum added on by women.

Across the UK, AXA found the most honest folk to be living in the East Midlands and the North East. On the other hand, adults in the West Midlands, Wales and London were the most likely to bend the truth.

To many, insurance fraud is seen as a 'victimless crime'.

AXA found that one in nine of us would exaggerate a claim because ' everyone does it'. Another one in 16 (6%) claims that 'insurance companies can afford it', not realising that their dodgy claims make home insurance more expensive for everyone.

How claimants cheat

According to AXA, these are the most common lies and exaggerations linked to home insurance:

• Televisions: inflated claims for replacement TVs peak in the run-up to big events such as the FIFA World Cup. Often, policyholders claim for a bigger or better TV than they actually have.
• Watches: Some people claim for the replacement cost of a 'designer' watch which is, in fact, a knock-off or counterfeit bought cheaply abroad.
• Cash: Often, people claim to have lost more money than was actually lost or stolen.
• Freezers: Dodgy claimants pretend to have owned a freezer full of lobster and fillet steak, rather than the usual ready meals, fish fingers and frozen peas.

Someone has to foot the bill

Of course, the problem with exaggerated or bogus claims is that they ruin it for everyone. By over-claiming for cash, TVs and other valuables, insurance cheats make it harder for the rest of us to make a genuine claim.

In other words, as fraud rises and insurers become ever-more suspicious, honest policyholders have to jump through hoops to get their claims paid. What's more, we end up paying for dodgy claims through higher home insurance premiums.

Thanks to my insurance background, I have a zero-tolerance approach to insurance fraud. If you exaggerate a claim, then you risk having your entire claim turned down -- and all because you bumped up your losses by, say, £100.

What's more, if you do exaggerate a claim, then your details will be passed to a national database used to monitor insurance fraudsters. Try getting home, car or travel insurance once your name pops up on that list!

Finally, insurance fraud is a criminal offence. During my career, I've provided evidence that put a fair few fraudsters behind bars, including a serving police officer sentenced to 18 months in prison!

So, be honest, because it will help to keep premiums down for everyone, including you...

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