Car insurance Updated:
Whiplash injuries in the UK are the source of many car insurance claims, and while most are genuine, some are not. In fact, recent research has found that one in 10 people admitted to either making a false claim or knowing someone who has – and consumers are paying the price.
According to AXA UK's latest report, 'Whiplash: consumer perspectives on a UK compensation culture', whiplash injuries and claims are an easy target for fraudulent activity, with 78% of respondents declaring that claiming for a whiplash injury is open to abuse. Another 73% stated that claims were easy to "embellish" in order to maximise compensation.
While the amounts actually paid out for compensation claims are relatively small, the claims handling costs can easily be two or three times the size, and it is these costs that are keeping up the price of insurance premiums for motorists. The costs of investigation, processing, lawyers' fees and medical reports all add up, and with so many Brits confessing to making or exaggerating false claims, it's no wonder that insurers are getting consumers to foot the bill.
Commenting on the situation, Chris Voller, AXA UK claims director, said: "One might expect that the percentage of people admitting to being or knowing a fraudster is lower than the real number, but even at the level indicated in our survey, the amount of fraud taking place is disturbingly high. This reveals the scale of the problem and the uphill challenge the UK Government and insurance industry still face if this proportion is to be reduced in the mid to long-term."
Clearly, something needs to be done to cut the number of people seeking compensation unnecessarily so that the rest of us can stop picking up the bill. A reform agenda is already underway, but premiums are still on the rise and the number and frequency of people making whiplash claims has failed to fall, indicating that more needs to be done to reduce the problem.
A number of proposals have been put forward, including mandatory medical investigations and a shorter time limit on making claims, and it seems as though the majority of motorists are in favour of these stricter rules, even if these changes cause premiums to rise in the short-term.
Of those questioned, 62% said that they would support the introduction of mandatory medical examinations even if their insurance premiums went up initially, while over half (55%) went even further, saying that an independent professional medical examiner should determine whether the claimant was suffering with a whiplash injury.
Interestingly, another 67% said that the time limit for making a claim should be reduced from three years to just six months. This, Chris Voller explains, could be the result of claims pushed by claims management companies. "There appears to be a general feeling of scepticism around those who claim for whiplash injuries up to three years after the accident… Although the UK Government has shown no appetite to alter the status quo in terms of imposing a tighter timeframe, we would like to see a maximum time limit in the UK."
In the future, it can be hoped that stricter criteria and tighter rules will help to eliminate more fraudulent claims, enabling the cost of the average car insurance premium to fall. However, there are things you can do in the meantime to keep your car insurance costs down.
If you want to save money on your car insurance, the number one rule is to shop around. Renewing your insurance with the same supplier without hesitation is a sure-fire way to miss out on cheaper premiums, so when it is time to renew, take a look at the market and see if there is a better deal out there. Our car insurance comparison tool can give you an idea of what deals are available, so take a look to see if you could cut down the price of your premium. To keep costs even lower, make sure you can take your no-claims bonus over to your new provider, too.
You can also cut down your premium by parking in a garage or driveway, where possible, or fitting an alarm or immobilising device to your vehicle. Paying for your insurance annually rather than monthly may also cut your bill, as some insurers may charge interest on monthly instalments.
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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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