MPs on the Parliamentary Transport Select Committee have published a report containing recommendations to reduce the number of fraudulent whiplash claims made in the UK.
The intention is to cut premiums paid by honest motorists, which are inflated by payouts on fraudulent claims. The good news for those in the market for car insurance is that premiums have recently fallen from a high point two years ago - they now typically stand at less than £420, having topped £550 in 2011.
This reduction is ascribed in part to a reduction in the number of successful whiplash claims - and this in turn is thought to be due to the banning of fee payments by personal injury lawyers and claims management firms. These were paid to insurance companies for the details of individuals who have made claims on their car insurance policies.
These individuals would then be encouraged to make specific claims for whiplash, with the legal firms taking a cut of their awards. The insurers would then reflect the high awards paid out in claims in the premiums they charged.
The insurance sector has also increased its scrutiny of accidents to identify 'staged' incidents and reject associated claims. 'Staging' is where parties collude to create the circumstances of a car accident or where an innocent motorist is targeted by fraudsters and forced into a crash, usually as a result of the criminal breaking sharply in front of them at a roundabout.
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The rise of whiplash claims
Whiplash claims are still estimated to add up to £90 to the cost of each car insurance policy in the UK, but there is widespread belief that a high proportion of such claims are bogus.
One of the Transport Select Committee's ideas is that drivers seeking compensation for whiplash should have to prove they sought and received medical treatment immediately after the accident. MPs also want doctors to pass a new accreditation system to help ensure any whiplash injuries they diagnose are genuine.
Members on the Committee said they were surprised to discover that, in a bid to reduce legal costs and other expenditure, insurers sometimes make a settlement offer to personal injury claimants even before a medical report has been received to prove the injury is legitimate.
This has prompted the Committee to demand that insurers "get their house in order" and end practices that encourage fraudulent claims. Failing this, it says the government needs to take steps to protect honest motorists.
One of the Transport Select Committee's ideas is that drivers seeking compensation for whiplash should have to prove they sought and received medical treatment immediately after the accident. MPs also want doctors to pass a new accreditation system to help ensure any whiplash injuries they diagnose are genuine.
Members on the Committee said they were surprised to discover that, in a bid to reduce legal costs and other expenditure, insurers sometimes make a settlement offer to personal injury claimants even before a medical report has been received to prove the injury is legitimate.
This has prompted the Committee to demand that insurers "get their house in order" and end practices that encourage fraudulent claims. Failing this, it says the government needs to take steps to protect honest motorists.
The crackdown comes following a sharp rise in the number of whiplash claims in the UK in recent years. According to the Association of British Insurers (ABI), claims for whiplash have risen by a third in the last three years, even though the number of car accidents has fallen. Every year, 570,000 people claim for whiplash injuries.
Whiplash has proved popular with fraudsters because it's impossible to detect or disprove using x-rays and other medical techniques, which means it's easy to exaggerate the condition, or even invent it entirely.
But whiplash claims are now costing insurers more than £2billion a year, with honest drivers being forced to pay the pricefor the proportion that are fraudulent.
Louise Ellman MP, said: "To help bring insurance premiums down the government must tighten up the requirements for motor insurance claims and ensure that insurers honour their commitment to reduce premiums. The government should consider requiring claimants to provide proof that they have either been seen by a doctor or attended A&E shortly after the accident. There should be a presumption against accepting claims where adequate proof of injury is not provided."
The Committee has also recommended that medical reports are randomly checked each year to identify poor practice and to improve standards, after insurers suggested that medical reports often exaggerate how long whiplash symptoms will last.
Whiplash has proved popular with fraudsters because it's impossible to detect or disprove using x-rays and other medical techniques, which means it's easy to exaggerate the condition, or even invent it entirely.
But whiplash claims are now costing insurers more than £2billion a year, with honest drivers being forced to pay the pricefor the proportion that are fraudulent.
Louise Ellman MP, said: "To help bring insurance premiums down the government must tighten up the requirements for motor insurance claims and ensure that insurers honour their commitment to reduce premiums. The government should consider requiring claimants to provide proof that they have either been seen by a doctor or attended A&E shortly after the accident. There should be a presumption against accepting claims where adequate proof of injury is not provided."
The Committee has also recommended that medical reports are randomly checked each year to identify poor practice and to improve standards, after insurers suggested that medical reports often exaggerate how long whiplash symptoms will last.
Support from the ABI
The ABI has said the Committee was "right to identify the need to tighten up the requirements for those submitting whiplash claims".
James Dalton, head of motor insurance at ABI, said: "There has been a growth in recent years in claimant lawyers and claims management companies encouraging people to submit an increasing number of frivolous or exaggerated claims."
But he added: "The Committee's report has kicked into the long grass making the tough calls for reform that are needed to help insurers combat the whiplash epidemic and deliver further premium reductions for hard-pressed motorists."
James Dalton, head of motor insurance at ABI, said: "There has been a growth in recent years in claimant lawyers and claims management companies encouraging people to submit an increasing number of frivolous or exaggerated claims."
But he added: "The Committee's report has kicked into the long grass making the tough calls for reform that are needed to help insurers combat the whiplash epidemic and deliver further premium reductions for hard-pressed motorists."
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