Insurance dishonesty costing the consumer

FRAUDULENT home insurance claims are costing honest policyholders around £13 a year in higher premiums, research has indicated.

Insurer Axa said it had seen a rising trend in recent years for people to submit exaggerated claims under their home insurance, with one in three insurance brokers also saying they thought the problem was worse than a year ago.

Research carried out for the group found that 8 per cent of people admitted they had inflated a home insurance claim, exaggerating the value of their belongings by an average of 2,898. A further 36 per cent of consumers said they would consider inflating a claim if they made one, with 47 per cent saying they either thought it was "fair game" to do this, or "not too bad".

One in ten consumers said they thought it was all right to exaggerate a claim as everyone did it, with a further 6 per cent saying they thought insurance companies could afford it.

People are most likely to exaggerate the value of a television. Other common scams include making a claim for a designer watch, which was actually a counterfeit one bought abroad, claiming for a freezer full of expensive food, and inflating claims for cash that was stolen following a burglary.

James Barclay, home underwriting manager at Axa, said: "Exaggerated claims have always been an issue for insurers but over the last few years there has been a marked increase. "Generally, people see it as a victimless crime but ultimately, honest policyholders foot the bill."

YouGov questioned 56 insurance brokers and OnePoll questioned 2,000 consumers.