Number of fraudulent motor claims detected up 70%

The Association of British Insurers (ABI) said its members uncovered 24,000 fraudulent car insurance claims worth £260 million during 2007 - the equivalent of £5 million every week.

Motor insurance was now the leading area for fraud, with dishonest motorists making bogus claims in a bid to make money quickly or clear debts, according to the ABI.

Overall, insurers uncovered 91,000 fraudulent claims on motor, household, travel and liability insurance during 2007, collectively worth £557 million, with motor insurance fraud accounting for nearly half of this.

The ABI said one policyholder had tried to claim on his insurance after saying his car was stolen. However, he later admitted he had pushed it over a cliff after it emerged that a local newspaper had carried a photograph of the wreck three days before the alleged theft took place.

The man said he had planned to use the insurance payout to meet his hire purchase repayments.

'More expensive'

Another policyholder claimed her Land Rover had been damaged when it hit the front of her house after her foot slipped off the brake.

It later emerged that the damage had been caused deliberately when she repeatedly rammed it into the front of her property following a row with her partner.

Nick Starling, the ABI’s director of general insurance and health, said: "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."