What’s driving claims activity in the UK?

Weekly whiplash news review: 7 days ended 5th Sept 2012:

It seems every time you turn around, there’s a new breaking news story about how accident claim figures keep climbing in the UK – but what’s driving all this activity?

The prevailing wisdom has been for some time that the number of whiplash injury fraud cases have gone through the roof, with scammers coming out of the woodwork to get their slice of the personal injury compensation pie. There’s quite a bit with this theory that’s true about it – there has been a massive influx of claims activity, even as the number of accidents occurring has gone down over the past few years, and many have attributed the increase to more people trying to defraud insurers.

The insurance industry has since stepped up efforts to curb instances of fraud as a result, with news emerging every week that an increasing number of fraud rings are being uncovered and their masterminds arrested. The most often scams are so-called ‘crash for cash’ schemes, where fraudsters cause rear-end shunts on purpose with the car behind them and then make trumped-up personal injury claims for themselves – and sometimes even passengers that weren’t in their vehicle at the time!

However, claims activity isn’t up so much just because of the number of criminals looking to get something for nothing from the insurance industry. In fact, many have laid part of the blame squarely at the feet of insurers themselves.

It was recently revealed that the majority of drivers that are involved in accidents that result in injury claims are actually exhorted by their insurers to bring the claim in the first place. Once an insurer has convinced one of its customers to bring a claim, it immediately turns around and sells the information to one of several personal injury solicitor firms for a tidy sum, which means insurers, keen to monetise car crashes, have been stepping up their encouragement in bringing claims that may be spurious at best in order to make a few hundred extra quid per sale off a solicitor firm.

The Office of Fair Trading found out about this back in May of this year, by the way – and they were not amused. The OFT had plenty of criticism for insurers that engage in these activities, and were also highly critical of any firms that pursue each and every claim to the bitter end instead of settling early and avoiding legal fees that drive up the costs for their customers.

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