We can halve our whiplash costs through reform, Aviva says

Weekly whiplash news review: 7 days ended 20 feb 2013:

Big news this week as a major insurance provider says that whiplash claims are bleeding the industry dry – but there are ways to reduce costs by up to half.

Insurance giant Aviva just came out with a new report that found we’re all paying around £118 extra on our insurance premiums, thanks to the sheer volume of personal injury claims for whiplash injury the insurance industry has to pay out every year. This works out to somewhere around £3 billion in excess costs, but the Aviva report says that this figure – and the amount you and I pay towards it on an annual basis – could be cut in half if we would just commit to a radical overhaul to the system.

Aviva’s claims director, Dominic Clayden, says that the insurance provider is committed to campaigning long and hard to put an end to these excess costs. The idea Aviva has to do so involves a removal of third parties that are all scrambling for pieces of the pie – such as claims management companies and personal injury lawyers – and instead have injured claimants speak directly to the insurer for the person that pranged them in the car park.

While this plan seems like a noble one, I don’t know if it’s really in the best interets of people injured in road traffic accidents. The average Brit doesn’t really have the specialised knowledge that can sometimes be required to navigate the Byzantine labyrinths of personal injury compensation claims, especially when the at-fault party is a massive car insurer with a whole legion of high-priced and experienced lawyers; while I don’t mind paying less on my premium every year I don’t know if I’m comfortable getting that discount because claimants are getting railroaded out of the compensation they deserve because they don’t have a legal professional representing their interests.

Still, something must be done about these skyrocketing costs. Another recent article I read this week said that insurance premiums have gone up by something like 80 per cent since the end of 2008 – that’s an absolutely eye-watering increase if you ask me, and heightened personal injury claims could be to blame for the increase.

For what it’s worth, I do believe that high accident claims figures have something to do with it. The Office of National Statistics has been scratching their heads for years now, considering how their overall road traffic accident figures can be going down consistently year-on-year but the number of claims are going up just as consistently; the only possible explanation is that people are getting more frail or that the economy is still so bad that people see an accident as an opportunity for a windfall by making an accident claim.

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