Fraudulent insurance claims cost the UK around £1.6bn a year, according to a survey of almost 7,000 people by the Association of British Insurers (ABI).

It estimates that false claims are costing the industry £4m a day, putting on £40 to the average premium paid by policyholders.

The commonest false claims are deliberate spills or cigarette burns on carpets and furniture to collect on policies – and 10% of the survey’s respondents admitted to cheating on their insurance company.

Around half of the fraudulent claims happen with home contents and buildings insurance policies, the ABI said.

Many claims centre on exaggerated injuries against local councils for tripping over loose paving stones or deliberately overestimating the value of personal items lost while on holiday.

“Honest customers pay for the cheats,” said Nick Starling, director of general insurance health at the ABI.

“These figures highlight that greater deterrents, such as criminal prosecutions, are needed to discourage fraud. This is why we are calling for police forces to be given more resources so that fraud can be treated with the seriousness that it deserves.”

However, Lee, a serial insurance fraudster, is unperturbed by this. “The police are too busy with everything else to bother with me,” he said.