How whiplash claims have affected the insurance industry
The insurance industry has been in turmoil in recent years and a large part of the bad press that the industry has been receiving has been due to impact of the rise in whiplash claims.
Indeed, figures, quoted by insurers, indicate that there has been an increase in the number of personal injury claims on the road since 2006, despite a simultaneous decrease in the number of reported accidents involving personal injury. This discrepancy is what insurers and the media have being using as a basis to support the assertion that “Britain is the Whiplash Capital of the World.”
The impact in figures
According to figures quoted by UK insurers, over 1,500 whiplash claims are made in the UK each and every day, which is purported to cost the industry an astonishing £2 billion annually.
In order to recoup these costs, insurers have taken to increasing the cost of the annual average insurance premium by a staggering £90, which, understandably, has resulted in a public outcry, as well as a deluge of media attention.
The Commons Transport Committee report
In recent months, the Commons Transport Committee, a cross-party task force, has been investigating the claims by UK insurers that car insurance premiums have been raised in recent years because of the astronomical increase in the number of fraudulent whiplash claims being made.
The intention of the report was to discover whether the assertions being made by insurance companies are genuine, whether new medical panels should be introduced to ascertain if a whiplash claim is legitimate and whether the small claims limit should be raised, which would allow insurers to settle smaller cases in small claims court.
The Commons Transport Committee’s findings
In July 2013, the Commons Transport Committee published their findings and they were findings that were by no means in line with what the insurance industry had hoped for.
The report committee found that, based on the information available, there was no conclusive proof that the number of fraudulent whiplash was rising at the rate quoted by insurers. In fact, the report showed that the number of whiplash claims has actually fallen rather drastically since 2011 and the figure now stands lower than at any time since 2008, with the number of claims falling by 60,000 in 2012 alone.
With regards to insurers’ desire to see new medical panels introduced, to ascertain whether whiplash claims are genuine or not, their views were largely discredited by the medical community, who were quick to point out that neither x-rays or MRI scans, the proposed means of assessing injuries, are of no discernible value, given that they are unable to detect whiplash symptoms.
Finally, the Committee concluded that by changing the small claims limit significantly, those with genuine injuries would no longer have access to justice, largely because the average person will be unable to represent themselves effectively in small claims court. The committee recommended, therefore, no change in the current threshold.
The future of the insurance industry
While the insurance industry hoped that the Commons Transport Committee’s report would find in their favour, helping the industry to recoup some of their losses over the long term, the reality of the findings has been altogether more damning.
The Commons Transport Committee has firmly told the insurance industry that they “must immediately get their house in order.” The hope of the Committee, moving forward, is that this report will provide the spur that the industry needs to start lowering premiums and making the claims process for a genuine personal injury, through a reputable firm, such as Jefferies Solicitors, all the more straightforward and less daunting for the average person.