Are Whiplash Claims Responsible For The Rise In Driver's Premiums?

The AA has told MPs that, unless steps are taken, motorists will continue to see an increase in insurance premiums for the foreseeable future. In a meeting with the Transport Select Committee, the president of the AA revealed that the rise in premiums was in direct correlation with the number of personal injury compensation claims - although statistics also showed that the number of collisions had actually decreased. MPs were also told that a high proportion of whiplash compensation claims made were fraudulent - and it these that are increasing the cost to honest road users.

The recession and marketing to blame

The Chief Executive of the Motor Insurers Bureau, Ashton West, told the Committee that the level of claims was far higher in the UK than anywhere else in Europe. He believes that many motorists are tempted in the current economic climate to make fraudulent claims because of "aggressive marketing on daytime TV. It is creating a view that if you are involved in an argument which is not your fault, you can collect a pot of money."

The Committee was told that around 70% of all road accident compensation claims were for whiplash. Mr West added that: "Germany has adopted the approach that you cannot make such a claim if the accident was below a certain speed." While this may seem a strident policy, it could alleviate the burden that is currently borne by scrupulous motorists.

Difficult to diagnose

Because of its very nature, whiplash is a very difficult injury to accurately diagnose and consequently is a very easy injury to embellish or, at worst, falsify. The symptoms of whiplash have very few external signs, leaving medical professionals to rely on the testimony of victims. In addition, symptoms can vary from headaches and a sore neck to depression and immobility. While some symptoms appear with hours of an accident, cases have been recorded where symptoms have not made themselves apparent until months have passed. Because of these factors - and the increasing number of claims - insurers are giving extra scrutiny to whiplash compensation claims.

In financial terms, the cost to the motorist is significant - and increasing. Currently around half of the cost of the average motor insurance policy is used to pay for whiplash claims, fraudulent claims, legal fees and tax bills. In correspondence with this, the AA has recorded the biggest annual jump recorded on its benchmark Insurance Premium Index, increasing the average cost of a policy from 558 pounds to 792 pounds; an increase of almost 40%. Whiplash claims for less than 2,000 pounds tend to go unchallenged. However, the cost of each of these cases soon adds up to a shortfall that is taken up by honest motorists.

Not the only factor in rising premiums

While whiplash claims are a major factor in the increase in insurance premiums, they are by no means the only ones. Scams involving stolen insurance cover notes, the cancellation of insurance policies on purchase of a car and 'crash for cash' scenarios all add to the extra cost that honest road users are expected to bear. Unfortunately, those with genuine claims may find that their cases take longer to process as a result of the number of fraudulent claims that are being scrutinised.