Bogus Car Insurance Claims Put Up Premiums By 25%

Monday, 7. June 2010

Whiplash claims are becoming a pain in the neck to all motorists not just those that suffer the injury. Car insurance has increased by 25% in the last year according to the latest Retail Price Index (RPI). Insurers have blamed the massive surge on whiplash injuries. According to a spokesman for esure/Sheila’s Wheels group it’s the desire to push up injury claims, often by people chatting in the pub, that has pushed up the amount of money being claimed which in turn has pushed up premiums. Unfortunately it is difficult to weed out the large number of bogus whiplash claims as it is hard to prove whether a claim is genuine or not. Compensation solicitors add to the claims culture leading to exaggerated claims. In some cases it has been found that drivers disconnect their lights then jam on their brakes to induce an accident, just so that passengers can claim compensation for whiplash injuries. In 2008 the average personal injury payout was £3,512 of which the largest part was for whiplash. According to the Association of British Insurers each pound of insurance payout attracted 76p in lawyers fees. Whilst injury claims are increasing insurance premiums by 25%, legal costs are adding an additional 10%. Currently the AA, who compare rates between 80 insurers, found average premiums currently £968 compared to £854 last year. Government statistics for inflation over the last 12 months show the cost of running a car rose by 17.6%. The biggest increase was the price of fuel but insurance and tax weren’t far behind. By Graham Hill