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How Do Fraudulent Whiplash Claims Affect Your Premiums?

Tue, 15/08/2017
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In June, fraudulent whiplash claims made their way into the Queen’s speech as she read out 27 bills to be enacted over the next two years. One of these was the Civil Liability Bill, which aims to stem the flow of bogus whiplash claims. It will ban offers to settle claims without medical evidence, and it will also create a fixed tariff system for these pay-outs.

The government claims that the bill will save people £35 per year on their insurance premiums. But what effect are fraudulent claims having at the moment, and what else can be done about it?

What is Whiplash?

Whiplash is a neck injury caused by a sudden movement of the head, and it occurs when the soft tissues in the neck become damaged or sprained. Symptoms include neck pain, neck stiffness, difficulty moving your head, headaches, muscle spasms, and pain in the shoulders and arms. The symptoms can take several hours to develop after the injury, and can last a few weeks or months, and for some people even longer.

Whiplash is a common injury after being in a car accident because people are often thrown forwards or backwards during a collision. Unfortunately, its prevalence in these situations means that though there are many cases of whiplash reported, some of them are not legitimate claims.

How Common is Whiplash?

More than 1,500 whiplash claims are made in the UK every day – that’s 547,500 per year. This amounts to a cost of over £2 billion per year to the insurance industry and adds an extra £90 to the average motor insurance premium. But how many of these claims are legitimate, and how many are exaggerated or fraudulent?

Whiplash is difficult to prove or disprove, so it is tough to know how many claims are fraudulent and how many are genuine. However, Britain has been dubbed the “whiplash capital of Europe” and according to The AA, more than 800,000 small injury claims were registered through the Ministry of Justice last year. Around 750,000 of these were related to whiplash.

Why Is It Such A Problem?

Exaggerated or bogus whiplash claims are a type of insurance fraud, and though it may sound like only the insurance company suffers, it is far from a victimless crime. All motorists end up paying the price of this fraud – as well as other types of fraud such as ‘crash-for-cash’ schemes – through inflated insurance premiums.

What Is Being Done To Prevent Fraudulent Claims?

The Civil Liability Bill aims to introduce a cap of £425 on claims for minor whiplash injuries. Compensation would only be paid if a medical report could be provided as proof of injury. For more significant injuries, a tariff system will be introduced, and offers to settle claims without medical evidence would be banned. The limit for cases in the small claims court would be raised from £1,000 to £5,000 for all personal injury claims.

What If You Need To Claim For Whiplash?

It is worth noting that it is a bad idea to exaggerate a genuine claim in the hopes to get a larger pay-out, because you could face losing compensation you are entitled to, and also end up footing the bill for your legal costs. However, if you are making an honest claim, you have no reason to worry.

Despite this “compensation culture”, many whiplash claims are genuine, and people who have been injured in a collision shouldn’t be put off from making a legitimate claim. You will need to visit a GP after your accident and obtain a report from a MedCo expert as proof of your injury. The new bill is designed to cut down on bogus claims, so if you have a real injury you shouldn’t be affected.

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