The car insurance industry is being overwhelmed by the amount of fraudulent car insurance claims, according to new figures from the Association of British Insurers.

The figure suggest that motor insurance fraud costs the industry around £5million each week, or £260 million per year.

These fraudulent claims do not just hit the insurance companies, their battle against fraudulent claims is reflected in the rising price of car insurance, costing honest drivers an average of £40 more per year for their insurance.

On top of this there is the added cost to insurance companies of investigating false claims and the expense of setting up the Insurance Fraud Bureau, which was set up in 2006 to investigate accidents which are staged in order to claim on insurance.

It is much harder to calculate of course, but all this reflects on the consumer and honest taxpayers are covering the cost.

A spokesperson from the Association of British Insurers was adamant that people out there must not view car insurance fraud as a victimless crime which merely attacks unscrupulous insurance companies.

The spokesperson said: “Insurance fraud is no victimless crime. Honest motorists pay through higher insurance premiums. 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

According to the figures, fraudulent and false claims have become a major problem in recent years,with the number of fraudulent claims made having risen by a whopping 70 per cent in just three years.