September 21, 2018

False whiplash claims affecting car insurance policy premiums

With over 600,000 whiplash claims made a year, costing insurance companies a total of £2 billion a year, it is no wonder than insurance policy premiums have risen by 40% since 2006, despite road accidents actually decreasing by 20%. False whiplash claims are seen by many as quick and easy way of making money.

As there is no way of actually diagnosing whiplash, some people take it as an opportunity to make some money by faking a case of whiplash.

With 203,950 road casualties being reported to the police, 600,000 seems an extreme number for people suffering whiplash in road accidents.

Due to the lack of independent witnesses in most cases of whiplash, insurance companies often have no option but to declare both parties liable and pay out on a whiplash claim.

The cost of taking each of the six hundred thousand claims to court could bankrupt many insurance companies, who find it easier and cheaper to settle outside of court in whiplash cases. However it is the average Joe that will suffer.

To circumvent the £2billion pay-out, insurance companies have opted to raise their premiums, with the average Briton paying £1,000 a month for their insurance, a huge increase from the £350 of 1994.

As a country we are paying roughly £10 billion a year in insurance, a fifth of which is being spent on whiplash claims.

Despite car accidents, car related crime and car prices all falling in recent years, care insurance has continued to rise, and many blame the false medical claims, such as whiplash, that see insurance companies losing billions every year.

With many older drivers paying more for their insurance than the worth of their car, many have begun to question the governments ‘pick and choose’ attitude towards car-insurance.

The Government makes it a legal requirement for all car drivers to be insured if their car is on the road, however it puts no legislation into place to cap insurance policy premiums, giving insurance companies free reign to charge extortionate prices to the cash strapped public, despite the economic downturn in recent years.

On the other hand, the government also says they are doing all they can to bring down fraudulent claims, and are looking into news ways to stop fake whiplash claims, which add £90 a year to car-insurance bills a year.

New possibilities include independent medical panels, and greater research into testing for whiplash. Some doctors can make up to £195 processing whiplash claims, and so independent medical panels would stop doctors cashing in on false claims.

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