The insurance industry is uncovering an average of 335 fraudulent claims worth £2.3 million every day, figures have showed.
Home insurance has become the most common type of cover on which people try to commit fraud, with around 170 bogus claims found each day, according to the Association of British Insurers.
Typical home insurance frauds involve people trying to claim for alleged accidental damage to carpets or furniture, often caused by spilt drink, when insurers find that the damage was actually caused deliberately.
Motor insurance is also a popular target for fraud, with around 108 dishonest claims uncovered each day, collectively worth £1.1 million.
But while insurers are employing a range of increasingly sophisticated techniques to detect fraudulent claims, many policyholders are found out because of their own stupidity.
One man tried to claim on his home insurance policy for the theft of DVDs which he said he had bought locally, but the titles had yet to be released in the UK. And a woman reported her husband for exaggerating the injuries he received in a car accident after he walked out on her when he received a £385,000 payout. He had been pretending to be badly injured for three years.
In another case, a policyholder tried to claim for extensive damage to his car caused when he crashed it during a race at the Nurburgring race track in Germany. The man shipped the vehicle back to the UK and left it on the side of the road, where he claimed the damage had happened.
One man tried to lodge an insurance claim for a head injury which he claimed he sustained after falling over a loose paving stone, but which was actually caused when he was hit with a baseball bat during a fight.
The ABI said in the five years since it has been collecting data on insurance fraud, one of the most bizarre bogus claims that came to light was that of a man who claimed he had been left unable to walk after an accident. But his fraud was uncovered when his photograph appeared in a newspaper after he was named leading goal scorer for his local football team.
Nick Starling, the ABI's director of general insurance and health, said: "Insurance fraud adds an extra £44 to the average UK household's annual insurance bill. This is why 2011 will see insurers intensify their war against the cheats, to protect their honest customers."