Insurers are starting to use Google’s Street View and credit-reference agencies to tackle a rising tide of fraudulent claims.

Hiscox, one of Britain’s largest insurers, says it is considering using the internet tool to assess suspect claims. Steve Langan, its UK retail managing director, said: “It could, for example, help determine the proximity of a house to a burst water pipe or a gas explosion when a claim for damage is being made.”

Insurers are also using credit-reference agencies to assess risk in the way a bank might before offering a loan. Graham Odiam at Call Credit, one of Britain’s three main agencies, said: “It may be that individuals making fraudulent claims are doing so as a result of being in, or on the brink of, financial trouble.

“We can help insurers identify individuals who are under pressure by flagging when county court judgments are lodged or when insolvency occurs.”

Though insurers already use Google Maps, the use of Google Street View, which provides street-level photographs, highlights how they are stepping up their fight against fraud.

Insurers already use voice-recognition technology as well as psychological tests such as asking claimants to describe the events surrounding their claim in reverse order.

However, there are concerns that insurers are denying legitimate claims to cut costs. The Financial Ombudsman Service (FOS) saw complaints about buildings and contents insurance jump 29% and 23% respectively in the 12 months to the end of March 2009. About 40% of all claims are upheld.

Many of these disputes relate to “matching set” or “accidental” damage claims, as insurers fight claims “more vigorously”.

For example, one claimant refurbished an entire bathroom because she was unable to find a matching replacement for her damaged bath. The insurer refused to pay for anything other than the bath.

The FOS concluded that the insurer should pay for the replaced bath and 50% of the cost of the other items. It said this was “in line with what is generally regarded as good practice in such cases”.

In another case, an insurer refused to pay the full cost of replacing flood-damaged carpets, insisting the claimant should use cheaper suppliers.The ombudsman decided in favour of the claimant, ordering the insurer to pay for the more expensive carpets.

Emma Parker of the FOS said: “Make sure you provide as much detail and evidence as possible when making a claim. This includes receipts, or credit-card statements. Try to keep the claim details to just one sheet of A4 if possible. If your insurer refuses a claim, get them to explain exactly why, preferably in writing.”

Times Recommends

• How to sell your home in a downturn
• How to boost your spending power
• Unemployment benefits explained