Wednesday, 15 June 2011

Call to crack the whip on compensation claims

Car and van drivers are paying higher insurance costs because of a sharp rise in fraudulent whiplash claims, which cost the insuarance industry nearly £2 billion a year.

Insurers are now calling for a clampdown on the fraud after it was revealed that one in every 140 people claims for a whiplash injury every year – the highest figure compared to the rest of Europe.

The NHS spends around £8 million a year treating injuries of this kind but insurers have been forced to pay out nearly £2 billion to claimants, according to The Association of British Insurers.

This drives up the cost of motor insurance premiums for honest consumers by 20 per cent, or £74, at a time when motor cover has soared by 40 per cent in the past year.

Around 1,200 whiplash claims are made in the UK every day, six times more than the number of people who claim for work-place related injuries each year. Three-quarters of personal injury claims in the UK are for whiplash, the highest level in Europe.

Speaking at this year’s Whiplash Conference in Leeds, James Dalton, the ABI’s assistant director of motor and liability, said: “Despite the statistics I doubt that that the UK has some of the weakest necks in Europe.

“Often difficult to diagnose, easy to fake and exaggerate, whiplash is a fraudster’s dream.”

The number of claims is rising thanks to ambulance chasing lawyers and claims management firms, as well as “cash for crash” incidents, whereby drivers stage an accident to make a claim, the ABI said. Last month a “cash for crash” gang was jailed for a £5.3 million insurance scam.

The ABI is now calling on insurers, doctors and lawyers to create a partnership, which aims to prevent whiplash, improve treatment and crackdown on fake claims.

Expert medical guidance is required on how genuine injuries can be diagnosed and treated. The association also wants to raise awareness among consumers about safe breaking distances, as tailgating is the main cause of the injury.

“We seem ill-equipped to effectively identify and treat whiplash, our compensation system is too slow in offering rehabilitation and paying fair compensation for whiplash injury to genuine claimants, and our compensation culture encourages fraud. All this must change.”
The ABI is also encouraging implementation of the Government’s proposals on civil justice reform, which would ensure genuine claimants get the compensation they deserve and access to rehabilitation more quickly.

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