Impounded Car Insurance UK report below on how a recent rise in whiplash claims has caused car insurance premiums to rise.
New laws were recently put in place to stop the vast number of fraudulent whiplash claims, but criminals have now found ways around these laws.
The average motorist is looking at a 15% increase in their car insurance premium this year due to massive numbers of fraudulent whiplash claims being made.
Insurers have warned that claims firms and motoring accident solicitors have found loopholes to exploit which will allow them to work around laws introduced to fight fake injury claims.
Whilst the number of accidents on Britains’ roads has not increased, a whopping 7,500 more whiplash claims are being submitted….every month!
As a result of these fake whiplash injury claims, giant car insurance firms such as Esure have seen their profits fall drastically. Car insurance costs will have to rise to make up for insurers loss in profits due to the cost of paying out thousands more whiplash claims.
For the first time in three years we are going to see car insurance premiums rise considerably. The AA have predicted an increase of around “10 to 15%” meaning that average drivers will see roughly £80 added to their car insurance costs.
In 2013 the Government took steps to reduce the number of fraudulent whiplash claims being made. They introduced a ban on referral fees paid out by claims management firms and medical professionals are no longer allowed to charge sky high fees to prepare whiplash injury reports. All claims also must now be looked over by a medical expert that has been randomly selected before being passed to the insurer for payout.
Since these measures were introduced we have seen a steady decrease in yearly car insurance costs but there has been a sudden surge in claims as claims firms have figured out ways around the new rules.
After the laws were first introduced, the number of claims submitted fell to around 60,000 per month. In 2014 this rose to 66,000 per month and this year the number has jumped to 73,500 claims submitted each month.
Solicitors and claims management firms are bypassing some of the new rules by asking their clients to contact one of their partner firms – instead of paying “referral fees” the companies make payment to their partners by other legal methods.
There’s also another sneaky way around some of the new legistlation. Claims firms have been caught submitting multiple claims for the same client’s case in the hope that one of them will land with a medical professional that they have a connection with. This way a payment can be made via the existing link to the professional and no blatant “referral fee” is actually paid.
This latest increase in car insurance premiums will also affect prices for seized car insurance policies. Seized car insurance is generally more expensive than standard insurance as a motorist is considered a high risk customer if they have comitted an offence serious enough to result in their car being confiscated.
