Insurers exposed a record £1.3 billion worth of fraudulent claims last year as the industry stepped up the war on cheats.
The latest total, released by the Association of British Insurers (ABI), marks an 18% rise in value on 2012 and equates to £3.5 million worth of insurance frauds being uncovered every day.
The body said there has also been a "significant" increase in people phoning up to report suspected fraudsters, indicating a growing acknowledgement that this is not a "victimless" crime.
Some 118,500 bogus or exaggerated insurance claims were detected in 2013, working out at the equivalent of over 2,000 a week.
Fraudulent motor insurance claims were the most expensive and common to be exposed, with 59,900 dishonest claims worth £811 million detected last year.
While there was a small fall in the number of detected frauds, their value has increased. The average fraud detected across all types of insurance products is worth £10,813.
The ABI said that various industry initiatives are helping to "turn the screw on cheats". The Insurance Fraud Bureau (IFB) was created in 2006 to tackle organised cross-industry motor insurance scams.
The IFB is currently supporting police forces and insurers across the UK to investigate 110 "crash for cash" scams where motor accidents are deliberately staged, which on their own represent approximately £120 million of financial exposure to insurers.
Meanwhile, investigations by the Insurance Fraud Enforcement Department, a specialist police unit dedicated to tackling insurance fraud, have so far led to 470 arrests and 85 prosecutions of insurance fraudsters since it was set up in 2011.
The ABI also said calls from members of the public reporting suspected insurance frauds into the IFB's "cheatline" rose by one third (32%) to 6,060 in 2013 compared with the previous year.
A spokesman for the ABI said there appears to be a "growing acknowledgement that (insurance fraud) is not a victimless crime, it's affecting people in their pocket".
He also pointed out that staged car accidents carry a safety risk to innocent members of the public. Sometimes, fraudsters will deliberately slam their brakes on so that an innocent motorist hits them from behind, or they will flash their headlights to pretend that they are going to let a driver out of a junction and then deliberately hit them.
The rise in the average value of insurance scams could be seen as a reflection of the high-end nature of frauds by organised gangs that are increasingly being uncovered, the ABI said.
Since 2007 the value of dishonest general insurance claims being brought to light has more than doubled, with the number detected surging by 30% over the same period.
Fraud is estimated to add up to £90 to the cost of everyone's general insurance policies.
Aidan Kerr, the ABI's assistant director, head of fraud, 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."
The ABI said some recent examples of cheats being exposed included:
:: Sixty people, including seven members of the same family, being convicted of a crash for cash staged accident fraud which involved over £514,000 being claimed from 25 vehicle crashes alone.
:: A professional golfer who claimed £8,000 on his income protection policy for a knee injury that he said left him unable to work, but was caught on camera giving golf lessons. He was ordered to do 140 hours unpaid community work.
:: A woman was jailed for 22 months following a series of invented street robberies for items including laptops and designer clothes.
:: A vet was jailed for two years for inventing veterinary claims totalling nearly £200,000 for treating non-existent pets.
One insurer, AA Insurance, said that it identifies over 100 attempts at fraud every week.
Simon Douglas, director of AA Insurance said: "These figures are encouraging because they reflect the growing success of the insurance industry in the war against fraud, rather than more fraud taking place."
He added: "This should send a strong signal to anyone thinking of trying it on.
"While you might not end up in prison, if an insurer finds that you have attempted to falsify a claim you'll find it difficult to obtain insurance cover in the future. Insurers don't like dishonest customers."