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Around 2,000 dishonest claims are being detected each week, amounting to around £14 million, according to the Association of British Insurers (ABI).
It revealed that 107,000 fraudulent cases were exposed during 2008, up 17 per cent on 2007 levels.
The highest value of these was seen in the motor insurance sector, while home insurance had the most untrue or exaggerated claims at 55,000.
Nick Starling, the director of general insurance and health at the ABI, explained that fraud “thrives” during times of recession.
He warned: “Cheating on your insurance really does not pay – you will get caught, future insurance will be more expensive and, along with credit, harder to obtain.”
The ABI represents around 400 members and was set up to oversee the interests of the UK’s insurance industry.