Car insurance scams cost honest motorists an extra £40 a year.

The number of drivers attempting to fraudulently obtain motor insurance payouts has risen 70% in the last three years, according to figures released today (3 July) by the Association of British Insurers (ABI).

The ABI said 24,000 dishonest claims were uncovered in 2007 worth £260 million – equating to £5 million a week.

Scams detected included a car owner who claimed his car had been stolen, however he had actually pushed it over a cliff.

Another was a Rolls Royce owner who claimed £10,000 for the alleged theft of the car’s front grill, hubcaps, steering wheel, seats and bonnet mascot. He had, in fact, removed the items himself which were later found in his home by the police.

Fraudulent claims lead to honest motorists incurring an extra £40 a year on their insurance premiums, the ABI said.

Nick Starling, the ABI’s Director of General Insurance and Health, commented: “Insurance fraud is no victimless crime. Honest motorists pay through higher insurance premiums – an extra £40 a year on average. This is why insurers are ramping up their crackdown to weed out the cheats.

“Anyone committing insurance fraud is more likely to get caught, risks a criminal record, and will find future insurance and credit harder to obtain and more expensive.”

By Natasha Piscitelli