The government has planned a crackdown on suspicious whiplash compensation claims following a 60% rise in just four years.
£2 billion in whiplash compensation have caused premiums to increase by around £90. This has sparked the move to create independent medical panels that will establish whether claims are genuine. There will also be a change to the system that makes it worth insurers contesting suspicious claims, rather than it being cheaper for insurance companies to simply accept them.
For a long time, honest drivers have been taking the fall for the dishonest ones. Despite vehicles becoming safer and accidents happening less frequently, the rise in claims has been dramatic. The head of motor and liability at the Association of British Insurers, James Dalton, puts it down to whiplash being the “fraud of choice”. He suggests that, “more effective diagnosis of whiplash will help genuine claimants get paid out quickly and reduce the scope for fraud”.
Also included in the reform that will come into effect in April 2013, is the banning of ‘referral fees’ which sees companies selling on someone’s personal injury claim.
Defendants will also no longer have to pay a legal insurance premium or success fee to the claimants’ lawyer.
Over one million motorists have made false insurance compensation claims, says car insurance expert at MoneySupermarket, Kevin Pratt. He says that, “exaggerating claims on even the most minor of incidents have contributed to an unprecedented hike in premiums over the last few years”. He goes on to say that drivers should shop around for the best deals to allow for the extra cost of false compensation claims until the changes are implemented.
Of course there are still many people who are genuine and have the right to make a whiplash compensation claim if they have suffered whiplash injuries in accidents that were not their fault. It is important to strike a balance between ensuring people who are genuine get the compensation they deserve, whilst also making sure that fraudulent people who do not deserve any compensation do not successfully claim.