A Guide to Changes for Personal Injury Pay-outs: Implications for Car Insurance
05-Jun-17
A Guide to Changes for Personal Injury Pay-outs: Implications for Car Insurance The Government has recently committed to two big changes to personal injury payments, both of which will have huge effects on the insurance industry as a whole. Motor insurers (and their policy holders) are likely to be particularly affected, with implications for future insurance costs. These two changes are reforms for whiplash claims and a reduction in the discount rate for large personal injury pay-outs. Whiplash Reforms: Why Make Changes? It is undoubtable that something had to be done to stem the tide of personal injury claims being made in the aftermath of minor car accidents. In the past 10 years, whiplash claims have increased by 50%, in spite of roads becoming safer and an overall decrease in the number of accidents.[i] Typing into a search engine; “Whiplash Claims”, results in a huge array of advertisements for easy ways to gain money following an accident. Top page adverts state “Claim for Whiplash. 30 Seconds Claim Calculator” and “Suffered Whiplash? Find out what you could claim.” Aggressive advertising, including phone calls and e-mails encourage people to make claims following accidents. There have even been reports of criminal gangs instigating crashes in order to submit claims for whiplash. The Association of British Insurers states that a review found that in 2014, insurance investigations uncovered £835 million of dishonest motor insurance fraud across the industry. [ii] Whiplash Reforms: An Overview With figures for whiplash getting out of control, the Ministry of Justice, with upcoming reforms, is now striving to bring figures down to a manageable amount with fraudulent claims much more difficult to make. At the same time, of course, they are keen to ensure that accident victims suffering genuine injuries have recourse to compensation swiftly and easily. The MoJ has announced plans to increase the fixed amount that can be claimed for personal injury in the small ...
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