The government is to set up a new taskforce that will tackle home and travel insurance fraud in an attempt to bring down the cost of premiums for everyone.
According to Chris Grayling, the Justice Secretary, the taskforce will radically cut down on fraudulent claims such as for whiplash which costs the industry billions every year, adding £50 to the average household policy.
Similar action has been taken in the car insurance sector, when cutting down on the number of fake whiplash claims supposedly reduced car insurance premiums.
One area in the home insurance sector that is susceptible to fraudulent claims is where people with contents cover lie about the value of the property stolen after a burglary, so that insurance companies have to pay out more to cover the supposed cost of the theft.
Mr Grayling said: “The Government has taken big steps towards reducing bogus whiplash claims but the problem needs to be addressed more widely beyond motor insurance.
“And I believe there is scope to consider a broader number of issues which contribute to claims fraud more widely.”
He described the way in which some consumers consider insurance fraud ‘fair game’ if they can get away with it, and that it is a legitimate payment that people can feel entitled to.
If no one committed insurance fraud then premiums would be cheaper and people might not feel so ‘entitled’ to the extra cash they can get from fraudulent claims. The government will hopefully manage to crack down on it and bring insurance prices down.