Change whiplash system to cut car insurance premiums

Change whiplash system to cut car insurance premiums
Date of Publication: Thursday, 14 February 2013 13:06

The UK's biggest insurer, Aviva, has said that changes in the way whiplash claims are handled could cut premiums for motorists.


The insurer said that cutting out claims management firms and middle-men for whiplash incidents could lead to an average saving of £60 per year for motorists on their insurance policies.


Aviva said that whiplash claims make up four in every five claims. Most of the 550,000 cases every year are filed by lawyers and claims management firms, who are charging large administrative fees.


These are occasionally hiked further, the insurer said, because the existing system allows these firms to offer referral fees to breakdown companies and brokers for information about accident victims.


This, in turn, has caused a hefty rise in the cost of car insurance and accounts for over £100 of a typical annual policy.


Aviva wants to see a reduction in this inflated cost by seeing the plaintiff’s claims directed to the insurer of the guilty party in the first instance.


Claims director Dominic Clayden said: "Our primary concerns are that injured parties receive care and compensation as quickly as possible, and that all motorists benefit from a reduction in the excessive costs that have built up in claims over the past few years.”


Claims management companies have also come under fire from banking chiefs in recent weeks, with concerns that they are encouraging false claims for payment protection insurance.


Critics of Aviva’s proposals say that directing an injured party towards the guilty party’s insurer would create “a profound conflict of interest.”


"Independent advice is key to preventing such a conflict and ensuring a fair outcome for the injured person," said the Association of Personal Injury Lawyers.

What you do make of the culture of claims and the rise to premiums? Do you believe the system should be changed? Drop us a comment below and let us know!


Daniel Morris


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