Car insurance bills double as whiplash claims soar
The cost of an average comprehensive insurance policy has doubled in the last two years, says the AA, as insurers pay out for ever more whiplash injury claims.
The Association of British Insurers (ABI) says claims for whiplash cost £2bn last year, adding £90 to the average car insurance bill. Meanwhile the cost of the average shop-around quote for comprehensive insurance has almost doubled in the last two years, according to the AA, which called on the government to act faster to get to grips with the problem of fraudulent claims.
The government, which is convening a summit with various insurance companies on Wednesday, is proposing a rule change to increase the limit for personal injury cases from £1,000 to £5,000 allowing more whiplash claims to be heard in the small claims court. It believes this would make it cheaper for insurance companies to defend their cases and deter fraudulent claims because more defendants would have to pay their own legal costs.
Justice Secretary Ken Clarke said: “It is scandalous that we have a system where it is cheaper for insurers to settle a spurious whiplash claim out of court than defend it, creating rocketing insurance premiums for honest drivers.”
Independent medical panels
Ministers are also planning to consult on the possiblility of introducing independent medical panels to consider whiplash claims – although it is not yet clear who would fund such an arrangement. The independent medical experts, who would have no direct links to either claimants or defendants, would replace the current assessment of whiplash injuries by either GPs or doctors employed by medical reporting organisations. Doctors can currently receive a fee of up to £195 to process whiplash claims, and some have a regular client base of solicitors.
570,000 people a year now make a claim for whiplash injuries – up by a third in just three years – yet the number of accidents on British roads is going down, leading the Head of Motor and Liability at the ABI James Dalton to comment recently:
“If whiplash were an Olympic sport, the UK would be gold medallists. The fact that whiplash is virtually impossible to disprove means that for too many it has become the fraud of choice, often aided and abetted by ambulance-chasing lawyers and claims management firms.”
Improved seat design
The motor insurance repair research centre, Thatcham, has found that the manufacture of seat design has improved considerably over recent years: the number of cars with “good” seat design – less likely to contribute to whiplash – has risen from 16 per cent to 51 percent. In 2010 only 9 per cent of cars had a “bad” seat design.
The AA, which has criticised the slow response to the problem of soaring whiplash claims, has urged the government to place controls on the huge volume of cold calls and advertising by personal injury lawyers. It also recommended a shift in the burden of proof from the insurance companies, which currently have to defend such claims, to the person alleging they have suffered whiplash.
However Karl Tonks, President of the Association of Personal Injury Lawyers, said: “Whiplash injuries are real, they can be long term, and must not be trivialised.”