Bogus whiplash claims

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What Car? Staff
20 Aug 2012 10:17 | Last updated: 14 Jun 2018 0:3

Government plans to tackle the growing problem of bogus whiplash claims in England and Wales will no doubt come as welcome news to honest motorists whose pockets are suffering from the effect of insurance fraud.

Whiplash claims are estimated to cost the industry around 2bn. While many of these claims are genuine, some are not. For example, recent figures from the Department of Transport show a 60% rise in road accident-related claims since 2006, despite a 20% drop in the number of reported accidents and improvements in vehicle safety over the same period.

The total effect equates to an extra 90 a year being slapped onto the price of the average motor insurance premium.

New whiplash proposals
Under the current system, it is often cheaper for insurance companies to accept any questionable claims rather than dispute them. New proposals will allow more claims to be contested by insurers in the small claims court, which will hopefully deter any opportunistic fraudsters.

The new measures will also create independent medical panels which will improve the diagnosis of whiplash injuries in the first place.

Tackling the compensation culture
Government proposals on whiplash claims are the latest in a series of civil justice reforms aimed at tackling the wider 'compensation culture' that is becoming a growing problem for insurers across the UK.

For example, changes to the law due to come into effect in April 2013, will see a ban on referral fees. This will mean an end to companies profiting from selling on personal injury claims and will stop claims management firms offering inducements to encourage people to claim through them.

The new legislation also aims to change the way no-win-no-fee deals work and make it easier for fraudulent claims to be brought before a judge.

Meanwhile, the Continuous Insurance Enforcement introduced in 2011, already makes it illegal to keep a vehicle without insurance unless it has been declared off road via a statutory off-road notification (SORN), while the Insurance Fraud Register (a central database that allows both police and insurers to check the details of any known fraudsters) is tightening the net further still.

Other kinds of fraud
The insurance industry still has a lot more work to do. 'Crash-for-cash' scams for example, is a growing problem where fraudsters go as far as to deliberately causing an accident with unsuspecting motorists before making bogus and exaggerated insurance claims.

Criminal gangs involved in these scams will often try to coerce innocent motorists into taking part, so if you are approached, or suspect anyone of being involved in a crash for cash scam, call the Crimestoppers Cheatline anonymously on 0800 422 0421.

A much more common trick is the practice of falsely claiming that another person is the main driver of a vehicle, something known as 'fronting'. This is often carried out by parents who claim that their children only drive a vehicle occasionally when they are, in fact, the main driver.

Many families might not think much of this practice but fronting is actually considered as serious as failing to declare and claims or convictions and can result in a fine, penalty points or even a complete driving ban.

Shop around!
The good news is you can take control of your annual car insurance premium right now. MoneySupermarket figures show that, by shopping around for your car insurance rather than 'auto-renewing' with your current provider you can save up to 30% off your premium which is a staggering 400 a year.

This article has been researched and written by whatcar.com's car insurance partner, MoneySupermarket