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Insurance fraud impacts on premiums
02 June 2008
People who commit insurance fraud are only harming themselves by increasing their own premiums, claims a finance company.
By making a fraudulent claim insurance premiums for the claimant and everyone else in their area will be a little bit higher the following year, according to Fool.co.uk.
David Kuo, head of personal finance at Fool.co.uk, said: "If you submit a fraudulent claim it filters through the system. The company may pay out the claim but eventually it will impact on everybody else’s premiums."
Fraudsters need to be aware that false insurance claims cost the industry over £1.5 billion per year and add at least five per cent to the average insurance premium, according to the Insurance Fraud Bureau.
"In actual fact it is not a victimless crime because you are the victim yourself as you will have to pay higher premiums next year," said Mr Kuo.
Research by insurance group RSA revealed that 1.2 million Britons thought that there was nothing wrong with lying on an insurance claim.
