THE level of car insurance fraud in East Lancashire appears to have ‘stablised’, despite a national spike in dishonest claims.

The Association of British Insurers (ABI) said the number of dishonest motor claims rose by 34 per cent last year, to 59,900, reaching a total value of £811m.

Local figures were not published, but the ABI said none of the ‘BB’ postcode areas featured in the 20 areas with the highest levels of insurance fraud.

Blackburn MP Jack Straw, who has campaigned to reduce car insurance premiums, said this supported anecdotal evidence that the picture is improving for East Lancashire drivers, who faced some of the largest bills in the country in 2010.

He said: “Premiums have been improving here, and in some cases have gone down.

“I think the industry and police have got much more effective at tracing fraudsters and there have been important changes in the law.”

“But there’s still no doubt at all that fraudsters are a national menace for whom all motorists are paying.”

Richard Fogarty, of Lancashire-based insurance firm Fogartys, said there were still certain postcodes which get hit with high premiums, such as BB2, which includes the west of Blackburn, and B11, which includes the south of Burnley, while some companies even refuse to offer insurance for these areas.

But he added: “I think prices have started stabalising in East Lancashire, whereas they may have got worse in other areas.”

Aidan Kerr, the ABI's assistant director, said the national rise in insurance fraud was due to increasing detection levels.

He said: "The message is clear: never has it been harder to get away with committing insurance fraud; never have the penalties - ranging from a custodial sentence and a criminal record to difficulties in obtaining financial products in the future - been so severe."