The Association of British Insurers (ABI) has said the number of fake claims it has uncovered has reached more than £1 billion for the first time.
Firms detected 124,292 bogus or exaggerated accident reports and the value of these frauds was £21 million every week.
Home insurance fraud was the most common of all, with 51,000 cases discovered across the UK. Detecting this saved insurers some £95.5 million in 2012.
Motoring claims were the most expensivel to the industry, with 42,700 filings identified as dishonest. If these were not found to be fake, this would have cost insurers £614 million.
A rise in the number of people attempting to fake whiplash injuries, sometimes after manufacturing road traffic accidents, has been highlighted as one of the main reasons behind this heightening.
The value of fraudulent claims was up by more than 33 per cent since 2007, with many recession-hit Britons looking to supplement their falling incomes with ill-gotten insurance money.
Nick Starling, the ABI’s director of general insurance, said: “There will be no let-up in the industry’s zero-tolerance approach to insurance fraud. Honest customers rightly expect nothing less.”