Fraudulent claims driving insurance costs to record levels

Fraudulent whiplash accident claims in the UK have been driving insurance costs to record levels, as a recent study has found that it now costs £1,000 a year for cover.

The AA’s most recent insurance premium study has found that the insurance sector has been struggling with a number of insurers that have had to hike their rates in order to recover the costs associated with ‘crash for cash’ whiplash claim scams. The motoring organisation’s researchers said that, in a combination with the bad weather, ‘excessive’ whiplash injury claims have been placing incredible amounts of pressure on the insurance industry as a whole, leading the average cost for a year’s worth of comprehensive cover to rise to an unprecedented £1,034.

The survey, which collected the five least expensive comprehensive premiums before averaging them together, found a year-on-year increase in prices of 8.6 per cent because of the massive personal injury compensation payouts being made by the insurance industry. However, there are many classes of drivers that are paying the price much more than others, as young male motorists – typically seen as the most risky types of drivers to cover – are charged an average of £2,792.

Some firms have been making cuts to their premium pricing in order to remain competitive, commented Simon Douglas, AA Insurance’s director, but the lion’s share of insurers are currently drowning under personal injury claims. With so many of these claims thought to be fraudulent, more needs to be done to regulate the injury compensation industry when it comes to whiplash claims, Mr Douglas added.

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