Personal injury claims biggest source of premium pain

Weekly whiplash news review: 7 days ended 6 Mar 2013:

It’s an incredibly painful experience paying for your annual car insurance cover these days, and insurers say  the biggest reason for this is whiplash injury.

In fact, the Association of British Insurers, the trade industry body for the car insurance sector, said that not only do personal injury claims end up costing insurers a bundle – and by extension their customers – but whiplash claims and the costs incurred by paying out on these claims account for a full 20 per cent of every premium. Spread across the 23.5 million motorists in the UK, that works out to some a lot of money lost just because someone supposedly is suffering from a stiff neck.

As far as the actual monetary cost that we’re all suffering under because of whiplash injury claims, car insurance giant Aviva said recently in an independent bit of research that the average amount we pay towards paying for whiplash claims is around £118 each. Aviva was rather sure that this figure could be cut in half rather easily if there were specific reforms put in place to discourage fraudulent whiplash claims, making the suggestion that the insurer thinks roughly 1 out of every 2 whiplash claims are made up or perhaps even originating from staged accidents.

While my first inclination is to distrust any large insurance company when it comes to things like this, I do have to admit that there could be something here in what Aviva’s saying. It’s common knowledge that UK roads are safer today than they’ve been in years, as the number of road traffic accidents has been on the decline for several years in a row – yet despite the improvements there are more car accident claims being made than ever before, which seems almost like a logical impossibility.

Either the UK is a nation of weak-necked complainers or there’s something fishy going on here, if you ask me. There most definitely could be quite a bit of insurance fraud going on here, since it’s so hard to diagnose whiplash injury and that the threshold for being awarded damages is so low – and let’s not forget that there have always been enterprising criminals looking to make a quick buck off of ‘crash for cash’ schemes.

I do have to point out though that Aviva and other insurers might bear just a bit of the responsibility for ballooning insurance claims, though. I mean let’s look at the facts: taking referral fees in exchange for passing on the personal details of injured motorists isn’t exactly helping to eradicate spurious personal injury compensation claim cases, now is it?

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