WHIPLASH CLAMPDOWN
A clampdown by insurers has cut the expensive toll of false injury claims – but car owners are still feeling the pain as premiums RISE
INSURERS are starting to win the battle against false personal injury claims, including whiplash. But there are questions over whether £1billion in savings are being passed on to honest customers.
THE number of insurance claims for personal injury following an accident has fallen dramatically in the past three years – a drop of nearly six per cent to 770,000.
The figures, compiled by the Government’s Compensation Recovery Unit, show half the total arises from motor accidents. At the same time, the typical cost of a claim has fallen by £124 to £10,600.
The figures reflect an industry getting tough on fraudulent claims, especially for whiplash – where someone suffers soft tissue damage to the neck or back following an accident.
Yet car owners are not feeling the benefit as premiums on motor insurance have climbed by 10 per cent to an average of £434 – among the highest in Europe. The mismatch has led to accusations that the industry has reneged on a previous promise to pass on savings once whiplash claims fell. Insurers insist they have passed on savings. They blame rising premiums on the dearer cost of repairs and the near doubling of insurance premium tax, with the latest rise yesterday taking it from 9.5 to 10 per cent.
WHIPLASH SCOURGE
THE UK has been dogged by bogus whiplash claims for years:
AT least 75 per cent of UK motor claims involve a whiplash-type injury. In Germany, the figure is 45 per cent – and France, just three per cent. Usually, motorists in France cannot claim for such injuries.
DESPITE road traffic accidents falling by nearly 40 per cent since 2000, personal injury claims have risen by 89 per cent.
THE menace stems from the growth of claims management companies seeking out crash victims and promising to chase insurers for compensation. Research by insurer LV= found households are deluged by 60 million cold calls and texts a year, many from claims companies.
ONE in nine ‘soft tissue’ claims – amounting to 85,000 a year – are suspect. There may have been a bump but the passengers simply pretend to have been injured.
BOGUS claims add £50 a year to the cost of motor cover.
DRIVERS who are blamed for the accident can lose their no claims discount, pushing up annual bills.
THERE are around 70,000 claims for whiplash every month, typically for £2,500 each.
CLAMPDOWN
IN 2013 the Government banned solicitors paying referral fees in exchange for details of accidents passed on to them. More recently it announced a clampdown on spurious whiplash claims and plans to have claims management firms regulated by City watchdog the Financial Conduct Authority by 2018. Judges can also now rule – under the Legal Aid Sentencing and Punishment of Offenders Act 2012 – that claimants for bogus injuries pay the other party’s legal costs. Guilty drivers can also be held in contempt of court while judges can rule dodgy claimants are ‘fundamentally dishonest’. Additional proposals include ending the right to cash compensation for less severe injuries (allowing insurers to meet rehabilitation costs instead) and raising the threshold for personal injury claims in the small claims court from £1,000 to £5,000.
CAUGHT OUT
THE insurers’ clampdown has had some high-profile successes. Footballer Gary Burnett’s goal landed him in court – because it came soon after he claimed to have suffered a debilitating injury in a road accident. Burnett, 24, tweeted about scoring for his team, Cheshire-based Northwich Victoria, following a £2,000 claim for whiplash after a bump to his car at a drive-through fast-food outlet in 2013. He had also tweeted about playing in an away match 24 hours after the incident.
His claim was challenged in court in Wigan and found to be ‘fundamentally dishonest’. He was ordered to pay the other driver’s insurer, Aviva, £11,000 in costs. The ruling led to him being found guilty of contempt of court and given a four-month jail sentence suspended for 12 months.
William Owen, 29, of Preston, also ran into trouble when he posted a tweet about coming seventh in a 10km road race in St Helens despite being diagnosed with whiplash following a low-speed accident on a petrol forecourt.
Aviva became suspicious when it saw his tweets and took him to court. The county court at Liverpool ruled Owen’s claim was fundamentally dishonest and he was ordered to pay Aviva’s costs of £9,213.
Richard Hiscocks, director of casualty claims at Aviva, says: ‘Such cases show that whiplash claims are still seen as easy money by those who are willing to “have a go”.’
In the past insurers often found it easier just to settle claims but now the industry is increasingly willing to challenge them. Tom Wilson, counter fraud manager at AXA Insurance, says: ‘With the introduction of the fundamental dishonesty rule, insurers now have an effective and genuine deterrent for those who wish to defraud.’
Rob Townend, from Aviva, adds: ‘Whiplash is not a victimless crime. It’s stressful for the motorist involved who may lose their noclaims discount if the fraudster is successful. It also pushes up premiums for all customers. Our stance is to defend more of these claims and to offer those who are genuinely injured care rather than cash.’
Rob Cummings, of the Association of British Insurers, says: ‘Insurers are determined to do all they can to tackle the country’s compensation culture and eliminate fraudulent and exaggerated claims.’