£840m of false claims spotted by insurers

A total of 122,000 claims were rejected by the industry for being fraudulent during the year, 14 per cent more than in 2008, according to the Association of British Insurers.

The rise is likely to be due to a combination of insurers becoming increasingly sophisticated in their fraud detection, and an increase in the number of people submitting misleading claims due to the economic downturn.

Around four per cent of all claims by value which were received by insurers during 2009 were found to be fraudulent, nearly double the figure for five years ago.

Home insurance accounted for the highest number of dishonest claims, at 62,000.

The industry uncovered 8,500 misleading liability claims, with many involving bogus personal injuries which would have cost insurers an average of 25,000.

In one case, a man claimed he had injured his hand after tripping over a pothole in the street.

But it later transpired he had actually hurt himself when he punched a wall during a domestic argument.