Uninsured drivers can have their vehicles crushed
Insurers uncovered £5m a week of fraudulent motor insurance claims, according to the industry body.
The Association of British Insurers (ABI) says 24,000 claims worth £260m were found to be dishonest last year.
They included one driver who pushed his vehicle off a cliff and then said it had been stolen.
Fraudulent claims led to honest motorists having to pay an extra £40 a year on average on their premiums, the ABI said.
It added that the number of dishonest motor claims had risen by 70% over the past three years.
"Insurance fraud is no victimless crime. Honest motorists pay through higher insurance premiums," said Nick Starling, the ABI's director of general insurance and health.
"This is why insurers are ramping up their crackdown to weed out the cheats.
"Anyone committing insurance fraud is more likely to get caught, risks a criminal record, and will find future insurance and credit harder to obtain and more expensive."
In another example given by the ABI, the owner of a Rolls Royce claimed £10,000 for the alleged theft of the front grill, hubcaps, steering wheel, seats and mascot on the bonnet. He was convicted after the items were found in his house.
In another case, a woman claimed her foot slipped off the brake of a Land Rover and the vehicle was damaged when it hit the front of a house. The insurer found the damage was caused deliberately after the woman had an argument with her partner.
Malcolm Tarling, spokesman for the ABI, was unable to put a figure on the amount the industry was spending on tackling fraud.
Deliberate crashes have been an issue for insurers
He said that the Insurance Fraud Bureau had been set up in 2006 to tackle "cash for crash" cases when accidents were deliberately staged for insurance purposes.
In some cases drivers brake sharply in front of innocent motorists and then make large claims for the damage.
Mr Tarling added that many insurance companies had their own anti-fraud units and information was shared through industry-wide databases to tackle the crime.