Insurers blame the personal injury claims industry while lawyers blame the insurers – but who’s really responsible for burgeoning whiplash claims?
The personal injury compensation industry is a massively lucrative market, resulting in hundreds of millions – if not billions – of pounds changing hands every year. The majority of this cash goes flows from car insurance companies into the pockets of those injured in road traffic accidents, but a healthy portion of these funds gets diverted towards the success fees that are paid to claimants’ whiplash claim solicitors, prompting many insurers to lay the blame squarely on the shoulders of ‘ambulance-chasing’ lawyers for the so-called compensation culture that has grasped the country, but what are the true reasons behind high claims figures?
crash for cash
Insurers constantly complain that their coffers are being drained by costly accident claims, especially since lawyers take a large chunk of that money in court costs and legal fees. These high payouts translate to insurers having to raise rates for their customers in order to recover their costs, leading to higher premiums and overall miserable drivers, and while insurers and lawyers are split over who’s to blame, they do agree on one thing: whiplash claim fraud is a serious issue and is contributing to much of the increased costs.
Organised fraud accounts for as many as one in seven of every whiplash injury claim in the UK, according to some figures, with the end result of some £400 million being spent on the litigation of these claims on an annual basis. Insurers, the legal profession, and law enforcement officials are all in alliance to try to bring these fraud figures down, but gangs of scammers perpetrating ‘crash for cash’ scams where road traffic accidents are staged on purpose are a very real danger, not just to insurers’ bottom lines but innocent drivers that can sometimes become embroiled in a staged accident; if you think you may have been targeted by a crash for cash scheme, make sure you inform the authorities immediately so you can do your part in stamping out fraud.
no one to blame but themselves?
Insurers complain long and loud about their increased costs, but there has been evidence that these insurance companies may have been inflating their costs themselves in an effort to line their pockets with as much cash as possible. In fact, the Office of Fair Trading recently referred the entire insurance industry to the Competition Commission after reports emerged that insurers may be colluding to artificially increase the costs associated with policy-covered car repair and car hire services in an attempt to maximise their profits in the wake of an accident.
If you feel that you have been the victim of such price-gouging at the hands of your insurer or been referred to a car hire firm or garage by your insurer only to face heightened costs, contact the Competition Commission in order to aid them in their inquiry into the situation.