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A pain in the neck

Something is amiss. Cars are getting safer and accidents are getting fewer but somehow whiplash claims are rising. The claims are now costing UK insurance companies £1 billion a year and some estimates predict that an astonishing nine out of ten whiplash claims are fraudulent.

Something is amiss. Cars are getting safer and accidents are getting fewer but somehow whiplash claims are rising. The claims are now costing UK insurance companies £1 billion a year and some estimates predict that an astonishing nine out of ten whiplash claims are fraudulent. Statistics experts, the Institute and Faculty of Actuaries (IFoA) points out that the rise in whiplash claims is disproportionate and goes against the trend of falling road accidents. The IFoA suggests that if such claims were genuine then they would rise and fall proportionally and in line with the rise and fall of car accidents.

Industry observers point to a rise in the UK of a so-called 'claims culture,' due to extensive television advertising by 'no win no fee' claims companies and injury lawyers. This trend started in the US but is now firmly embedded in the UK. The IFoA report that has uncovered the trend blames what it calls an aggressive approach by such firms in encouraging the public to claim compensation, a process referred to as 'claims farming.' Author of the IFoA report, David Brown, said that injury claims for 2010 had continued to rise despite falling accident numbers and he pointed to the rise in TV claims company advertising to account for this.

Mr Brown explained: "Last year our report showed a clear correlation between claim hot spots and the location of claims management companies," he said. "The proportion of claims for insured accidents involving bodily injury is higher in the UK than in the US, which is generally considered the most litigious jurisdiction. Recently the Transport Select Committee suggested that the UK was the whiplash capital of the world and they may well have a point." The IFoA report follows a study by Aviva, the UK's biggest insurer, which revealed that whiplash claims were adding £118 to every UK motorist's insurance bill.

The average whiplash claim in 2012 was for £9,512 and Aviva pointed out that car insurance premiums had risen by an average of 80% since 2008, largely as a result of such claims. The Association of British Insurers (ABI) has launched a campaign that calls for whiplash claimants to be forced to attend independent medical exams to substantiate their claims and weed out the fraudsters. MPs are now backing the ABI campaign and are also investigating methods of tackling fraudulent claims. The ABI also revealed that 80% of personal injury claims resulting from road accidents are for whiplash, which is more than double the rate in France, Holland and Spain.

 

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