Insurance providers have warned that there will be a crackdown on fraud, following a surge in the number of claimants seeking compensation for injuries caused by motor accidents.
In particular, the number of whiplash claims are on the rise, despite there being an overall decrease in road accidents. These claims range from exaggerated claims of genuine injuries, to entirely fictitious claims of accidents that have not occurred, to set-up ‘Cash For Crash’ incidents organised by gangs.
An easy pay-out?
This is following a case where 46 passengers on a bus attempted to claim insurance for whiplash injuries following a collision – £250,000 in total. The claim was found to be fraudulent when the nature of the collision was revealed. A Ford Fiesta, travelling at less than 10mph, bumped into the bus; there was just a small split in the car’s bumper and a £70 bill for damage to the bus.
The bus carried 46 passengers for a party, none of whom received medical attention before attending a night club that night. The case was handled by Aviva, who have long been critics of the UK’s laws on whiplash pay-outs (in the UK, 80% of all personal injury claims are for whiplash, compared to just 3% in France.) Many insurers automatically pay out on all whiplash claims up to £3,000, simply because this option is cheaper than fighting a case.
Aviva said that the injuries were ‘inconsistent with the damage caused to the vehicles’ and rejected the claims. 23 of the 46 passengers then hired lawyers to fight the case, but eventually all claimants dropped the case before going to court.
The head of fraud at Aviva, Tom Gardiner, said: “This claim highlights the outrageous scale of whiplash fraud in the UK… which frankly has become a national disgrace.”
The Public Cost of Insurance Fraud
An article on their website titled “Insurance Fraud Costs Everyone” details some facts about the level of insurance fraud in the UK, of which “false motor injury claims are the most common (54%).”
One of the reasons they have listed as a potential cause for the rise in fraud is that a cultural perception that this is a ‘victimless crime.’ However, Aviva argue that insurance fraud leads to a higher premium for innocent policy holders.
In November 2015’s Autumn Statement, George Osborne announced measures to crack down on whiplash claims. The report urged insurers to refuse to settle claims without a medical certificate, and to take a “more robust approach to defending claims.”
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