Fraud adds to home insurance costs

Home insurance policyholders are paying more for their cover due the number of people making false claims, according to a new study.

The Association of British Insurers (ABI) has released a report which shows that undetected fraud accounts for £1.9 billion of lost revenue for the general insurance industry each year, costs which are passed on to the consumer.

They have seen their insurance policies increase in price by £44 a year because of the criminal activity.

Examples of the fraud include one man, who claimed for a 42-inch widescreen LCD television, despite the fact it had not yet come onto the market.

Nick Starling, director of general insurance and health for the ABI, said: There is no hiding place for insurance cheats. Honest customers should not have to pay for the fraudsters. The tough approach taken by insurers to protect honest customers means that they are detecting more of the fraud committed.

A separate ABI report recently found that one in five home insurance policyholders would not rule out lying to insurers to gain money in the future.