Aviva, British biggest insurer, claimed that fraudulent whiplash claims are affecting the cost of everyone’s car insurance.
These whiplash claims have jumped up dramatically to 550,000 per annum, which is costing insurance companies £3bn. Aviva reckons that a lot of this cost – each whiplash claim costs on average £2,500 – is wasted on payments to claims management companies and legal fees. Aviva is proposing a solution to the “compensation culture”. If it goes ahead, this could reduce car insurance premiums by about £60 a year; car insurance premiums have increased by 80% since October 2008.
The Association of British Insurers (ABI) believes that up to 25% of all whiplash claims may be claimed for fraudulently. “For too long, it has been seen as the ‘fraud of choice’. Our roads are safer, yet every day over 1,500 claims are made. More effective diagnosis of whiplash will help genuine claimants get paid out quickly and reduce the scope for fraud, so helping to ensure that honest motorists do not end up footing the bill for the cheats through higher insurance premiums.”
As part of its research of nearly 400 drivers in the UK, Aviva found that only one third of personal injury claimants actually spent their compensation money on physiotherapy or other medical treatment. Some used the cash to go on holiday (9%), buy luxury items (12%), or even to pay off debts.