Whiplash adding £93 a year to average car insurance premium

New report claims whiplash-type claims returning to near-record levels.

The average car insurance premium is being bumped up by £93 a year as a result of whiplash-type claims.

That’s according to Aviva, which is calling for fundamental reform to address both the number of whiplash claims, which have returned to near-record levels, and the cost.

Around 2,300 a claims a day are going through to the Claims Portal, and by the end of the financial year it looks like 840,000 claims will have been processed. That’s up 9% on the previous year, the equivalent of an extra 200 claims a day.

Aviva said that of the motor injury claims it received in 2014, it found that a whopping 80% included whiplash. That’s a figure far higher than you see elsewhere in Europe. For example, in Germany whiplash features in just 47% of claims, while in France that figure plummets to just 3%.

And the number of whiplash claims are bumping up our premiums. The average motor premium in the UK is £372, 40% more than France and 50% more than in Germany.

The appeal of claiming for whiplash

One reason Aviva highlighted for the growing number of whiplash claims is the huge financial incentives for the third parties who submit the claims. The insurer said its research had found that an incredible 96% of personal injury claims it received last year were brought by third parties, such as claims management firms and personal injury lawyers.

There is also the growing problem of fraudulent claims. Aviva said that last year it saw a 21% increase in organised fraud compared to 2013. So between claims management firms and crooks, there is some very murky motivations behind the rising whiplash-related claims.

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How to fix the whiplash problem

Aviva reckons the UK’s “compensation culture” is at the root of the problem, and has outlined six ideas which it reckons will result in fewer whiplash claims, lower premiums, and stopping those who attempt to abuse the system.

Reduced limitation period

All claims should be made within 12 months of the accident rather than the usual three-year 'limitation period'. This is still more generous than the system in Sweden, for example, where symptoms must appear and be assessed with four days of the accident.

Time limits and a threshold

The symptoms (which must be more than ‘trivial’) should last longer than three months, and this must be proven by medical records.

Rehab – care, not cash

Insurers should provide up to three months of treatment to policyholders or the injured party, regardless of who is at fault. By removing the financial element, fraudsters won’t be tempted to abuse the system.

Medical evidence

Claimants must obtain an independent medical report from the Government vehicle MedCo between three and 12 months after the accident.

Level of disability

These medical reports should assess the level of disability caused. Compensation would only be recoverable where the expert reckons the level of impairment caused is 10% or more.

Predictable damages

Damages should be awarded against a “clear and transparent tariff”. In other words, you’ll know at the outset what you are likely to get, cutting down on unnecessary toing and froing between legal teams. France, Spain and Norway all have fixed damage tariffs for whiplash-type injuries.

Maurice Tulloch, CEO, UK and Ireland General Insurance at Aviva, said: “Our customers have told us they are fed up with the compensation culture and all its trimmings: the nuisance texts and calls from claims management companies, excessive lawyers’ fees and fraudsters abusing the system for their own financial gain. It doesn’t have to be like this.”

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