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Whiplash still causing a knee jerk reaction in the insurance sector

It seems a little strange that during the last six years there has been a 23% drop in the number of casualties caused by road accidents, which logically should equate to a drop in car insurance costs as there should be fewer claims. In actual fact, motor injury claims for the same period have gone up by 70% from 466,000 in 2005 to 790,000 in 2010/2011 – of which whiplash injuries account for 70% of the claims – often despite the lack of objective evidence.

This lends even more credence to the fact that we are indeed part of a huge 'blame' culture – and Britain is indeed the whiplash capital of Europe – which is very shaming indeed. Perhaps this is little surprise as there is a plethora of companies incentivising people to claim for personal injuries, offering cash advances and 100% compensation. It is seen a way to 'make a quick buck' and often in the mistaken belief that it doesn't hurt anyone except the large insurance companies. This idea is complete rubbish since everyone who pays their insurance premium forks out towards the costs of covering these often unsubstantiated claims.

Whiplash is neck injury caused by a sudden jerk, such as stopping quickly in a vehicle. However, the public health body (NICE) which provides medical guidance to the government has no formal diagnosis for whiplash. This can be difficult to confirm medically and a patient is taken to a degree at face value as to the extent of the discomfort being experienced.

Seat design has come under scrutiny recently too in case this was a contributory factor. Research has shown that despite a 70% rise in whiplash claims, the manufacture of seat design has improved considerably over the last five years. The number of cars with 'good' seat design – that is one which is less likely to contribute to whiplash, has risen from 16% to 51%. In 2010 only 9% of cars had a 'bad' seat design. We can therefore lay very little 'blame' at the feet of the seat designers.

Part of the problem for the rise in whiplash claims is that drivers are persuaded to take legal action by lawyers who make cold calls, following up on information which they have bought from insurance companies. Ambulance chasing lawyers as well as claim management companies are effectively driving up the cost of insurance premiums – indicating that the insurance industry must abandon sharp practices that push up premiums such as passing drivers' personal data to other parties or taking secret referral fees from solicitors, garages and car hire firms. These companies encourage people who are caught up in accidents which they did not cause to claim for personal injury, car hire and other legal costs. At the end of the day, it is all legal vehicle drivers who pay for these claims in raised premiums.

The Association of British Insurers (ABI) is taking steps to help the situation, realising that their customers are deeply fed up being bombarded with text messages and advertising inviting them to claim for whiplash and all the add-ons, when in fact all this does is result in increased premiums.

Draft legislation to ban referral fees relating to personal injury claims is already going through parliament. The transport committee said that the government should ensure a greater level of transparency with regard to all referral fee arrangements, not only when legal action is being taken. However, there are those who believe that this does not go far enough and that a complete ban on all buying and selling of customers' information is the best way forward.

So just how bad is Britain's level of whiplash claims when compared to the rest of Europe? Well, the European Insurance and Reinsurance Federation (CEA) suggest this problem is unique to Britain! In its most recent comparison of whiplash claims in 10 European countries, the UK comes out on top, with whiplash claims making up 76% of total claims for bodily injuries. In France, the figure is just 3% and in Finland 8.5%. Italy is the second highest, compared to the UK with 66% - and Norway comes in third with whiplash claims making up 53% of bodily injury claims. If only the UK and Norway could reach these dizzy heights in the Eurovision Song Contest instead!

The Ministry of Justice has said the department was already banning referral fees in personal injury cases, and reforming 'no win, no fee' agreement to remove excessive litigation incentives. Clearly there is a lot of work to be done to change the culture which has been created surrounding whiplash claims, but at least there are moves in the right direction.

Meanwhile, should you need any advice at all regarding vehicle insurance, make just one call to Westhill Insurance Services. As a professional and independent insurance company we will shop around to find the best deal to suit your budget – and this means finding you insurance cover you need, not extras which you don't! When you become a Westhill customer, you have access to an entire team of dedicated professionals who will take care of all your insurance needs, and we will be there for you should you ever need to make a claim. Insurance is a complicated business, and having good advice is vital if you are to get the cover you need at a price you can afford. Having peace of mind, knowing you have Westhill Insurance on your side is an added-bonus: affordable insurance and first class service may not have the 'grab-it' appeal of the 'no win, no fee' claims culture, but then we believe in providing a good quality product at a fair price. Our values never change.

Contact Westhill Insurance Services, today.

Posted on 15th April, 2013