Insurers spend mind-numbing £2b on whiplash in 2011

Car insurance companies spent more than a mind-numbing £2 billion on whiplash-related insurance claims in 2011, according to recent research findings revealed by the AA.

Insurers drowning under a heightened volume and severity of whiplash claims have had to pass on the costs to their customers in an effort to recover their losses, the AA said, which has resulted in the average car insurance rate going up by around £90 across the industry, leading the motoring organisation to comment that the claims system in the UK needs reform badly and in a hurry.

The AA’s research indicated that whiplash-related personal injury claims have been a major contributing factor to what has been the biggest increases to premium pricing over the past two years.  Comprehensive cover has risen by an average of 50 per cent during that period of time, the motoring organisation reported.

However, there may be some hope and relief on the horizon, especially as new governmental measures are expected to be laid out that will make it much more difficult to make fraudulent injury claims.  The planned reforms will make it simpler, cheaper, and faster for legitimate injury claims to be dealt with, said Justice Secretary Kenneth Clarke, as these claims will be able to be relegated to small claims court.

The proposals are set to be finalised this summer during a consultation.  One of the major issues to be discussed include the feasibility of introducing independent medical panels to examine the validity of injuries sustained during accidents, and would also drive down costs as current GPs or doctors who assess these injuries are paid as much as £195 a claim to process medical information, thus inflating the costs of bringing a whiplash claim.

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