Car insurers paid out £2.4bn less in 2014 than in 2010 despite warnings of an increase in injury claims.
New figures have revealed that car insurance claims have fallen by 29% since 2010, just one month after George Osborne announced new measures to restrict fraudulent minor injury claims and save insurers £1bn a year.
Government figures suggest that minor injury claims cost the insurance industry around £2bn every year, which equates to approximately £90 per policy, as previously reported in on December. IS THIS THE END FOR PERSONAL INJURY COMPANIES?
During his Autumn statement last year, the Chancellor of the Exchequer said the costs for insurers were ‘out of all proportion to any genuine injury suffered’.
As a result, compensation for minor whiplash injuries sustained in car accidents will be banned and the threshold at which personal injury lawyers can take cases to the small claims court will rise from £1,000 to £5,000. This will reduce legal costs putting the personal injury sector at threat and could possibly result in the closure of many personal injuries companies.
Why is the Government doing this?
Earlier last year Aviva reported that the number of motorists making claims for whiplash related injuries had soared to more than 840,000, a 9% increase from 2013-14, a near-record level. WHIPLASH CLAIMS REVVED UP!!!
Aviva referred to the issue at the time as our compensation culture, with too many claims still being either fraudulent, staged or extremely exaggerated.
Thompson Solicitors, an experienced personal injury practice, say;
“Motor insurers have exaggerated the problem and as a result landed a multi-billion pound windfall”.
Motor insurers want Aviva to issue a breakdown of its profits after accusing the insurer of exaggerating minor injury claims problems.
Claims costs for insurers have been falling significantly over the last five years, but exaggerations of a whiplash claims problem has been used to attack the rights of honest motorists and has meant huge profits and dividend windfalls for the major motor insurers and their shareholders.
It seems that Aviva want to have it both ways; they want us to believe there is a pandemic but also they say that their business is lucrative.
Premiums have increased in the last year. Motorists are threatened with legal changes that mean in the event of being involved in a road accident, they will either be awarded less compensation, as they’ll have to pay for their own lawyer or they will have to take on insurers directly themselves.
If there is a crisis show us the evidence…I’m guessing we haven’t heard the last of this story and we’ll continue to keep you updated with any development.