/ Motoring

The end of bogus whiplash claims?

Personal injury claims from car accidents cost the UK billions every year. Part of this is caused by insurers selling details of customers’ accidents to lawyers. At last, the government is set to ban these referral fees.

The cost of personal injury claims has doubled in the past decade, from £7bn to £14bn. This in turn has had an impact on car insurance premiums, which have risen by 40% in the past year. Finally the Office of Fair Trading has said it will investigate this damaging trend.

As far as personal injury claims, in many cases these are phantom claims, where no real injury has been incurred. Clearly someone’s making a killing and, guess what, it’s not the law-abiding consumer.

So you have whiplash do you?

Jack Straw MP, the former Labour cabinet minister, recently lashed out at the insurance sector for selling on customers’ details to personal injury lawyers. He chastised insurers for stoking the flames of litigation by selling policyholders’ contact details to firms who encourage people who have been involved in a prang to make a claim.

Thankfully, the government last week announced that it is to ban these referral fees, in order to stop exaggerated or even bogus personal injury claims from impacting insurance premiums for everyone else.

In fact, the most common claim is for whiplash, which often cannot be medically confirmed, given the lag between an accident and the matter being processed. Yet whiplash accounts for around four-fifths of personal injury claims, and costs the insurance sector about £2bn a year.

Can you afford further insurance hikes?

So if personal injury claims are pushing up the cost of insurance, why have insurers added insult to ‘injury’ by selling leads to these companies? The industry’s answer is that if they don’t, someone else will; be it the police or recovery services.

The industry may bemoan the costs incurred to them, but it’s motorists who have borne the brunt, as, on average, our premiums have risen by 40% a year – something that surely can’t continue for long or we’ll all be priced off the road.

Although the government is set to ban insurers from selling on customers’ details to personal injury lawyers, it would seem that some insurers are already breaking the law. Under current privacy legislation, a company cannot automatically opt you into receiving marketing from other firms. This should ensure that insurers can’t sell on your details to personal injury lawyers without your consent.

But a number of big insurers have clearly been abusing this legal requirement – hopefully the government’s latest action will put this to rest. In the meantime, if you fill out an online car insurance application and can’t see a clear opt-out of third-party marketing, think twice before proceeding.

Comments
Guest

The only thing that’s surprising to me is that this has taken so long. Next get rid of the actual companies that deal in this bogus trade as well and the world will be a better place.
There’s clearly a case for injury compensation in some cases so use the currently available option of a lawyer employed by the insurance company and let them proceed only if the case is obviously genuine and achievable.
I was contacted several times by one of these firms after a very minor collision which was nobody’s fault but my own. The only conceivable injury was to my sense of pride in my driving ability and to my bank balance.

Guest

I think the insurance industry [possibly through the Motor Insurers Bureau on behalf of all companies] should also be carrying out detailed research into whiplash and how it can be prevented or minimised. It does seem odd that the number of personal injury accidents on the roads is in decline [despite the massive increase in traffic volumes], wearing a seatbelt is compulsory, and head restraints are fitted – albeit not necessarily adjusted correctly – in almost all cars, and yet whiplash claims are rising to 80% of all claims. Perhaps it is a consequence of the safety benefits of seat belts, airbags, crumple zones, and MOT’s that whiplash is virtually the only serious injury sustainable in a rear-end shunt upto 30 mph. It would be interesting to know how much the insurers pay out on average per claim and what lengths they go to in resisting claims; if they’re feeding the litigators they can hardly complain if they get claimed against, the trouble is all drivers get hit in the premiums by the ricochet. The notion that police officers would sell information to dodgy lawyers is, of course, so far fetched as to be ludicrous.

Guest

This all seems very interesting. Definately a lot to think about. Thanks

Guest

Perhaps restoring the ban on advertising by legal firms would be most helpful.

Guest

I know we pay enough for our high Insurance costs at present through additional claims for whiplash etc, maybe add an extra as a option to your motor insurance like if you want no claims protection on your insurance. Put a personal injury cover on there for all insurers, if you don’t have it you can’t claim even from the third party, where at the moment your general cover, covers this?

Guest

Years ago I was in an accident and my car scooted across the road and ended up on the pavement, luckily no-one was hurt. I was dazed and had a bit of a achy knee. The policeman that came round more or less suggested I should claim for whiplash. As I had no whiplash I would not do this but it shows how easy it is when the police is behind you all the way.
Stop the advertising of injury lawyers

Guest
BobP says:
15 March 2012

I am seriously looking into fitting a black box recording device into my vehicle myself for obvious reasons . The whole point of this is if or when there is reason to make a claim it is recorded on this equipment , Actual place where it took place { map reference } , time of occurrence , speed , video evidence of accident if in front & in view of the lens on the camera , or on certain models perhaps from the rear view . This is now being used in many countries throughout the world by insurance companies & law courts . In many cases this would give true evidence as to what happened , saving many thousands of pounds while showing what or how it happened . This would save the poor motorist who was in the right , also give the insurance companies / police a true picture of what took place . This in turn would help insurance premiums to be kept at a lower amount for the safer drivers . also proving if a whiplash claim could be true or completely untrue owing to the evidence shown by the video recording of 10 seconds before the impact & 10 seconds after the impact . For any ones interest just tap in vehicle black box into website & full information of the devices will come up .

Guest
Simon says:
6 May 2012

My insurance raises continuously – no accidents in 20 odd years of driving and still raising costs for me – if they sued the people that falsely claimed or even put them into prison maybe others would think twice about ripping insurance companies off – to add insult to injury (forgive the pun) – you will also find alot of these false claims are coming from people that don’t pay insurance themselves …. law abiding people again get fall out from these ‘american style’ injury lawyers – in my book these lawyers are just insurance fraudsters (maybe jail them all is only answer) – you also find most of the time the insurance company just pays out without taking it to court because its easier option – this only seems to be getting out of hand in UK why? why only here?

Guest
Dean Clarke says:
17 December 2014

My wife is constantly receiving calls from various companies trying to convince her to lie about and accident and say she was hurt. It is borderline harassment and we do not seem to be able to stop it…..