MPs criticise insurers for paying whiplash claims without medical evidence

The Transport Select Committee (TSC) has criticised insurers for opposing a ban on paying a whiplash claim without medical evidence.

In Driving premiums down: fraud and the cost of motor insurance, the committee said it was “unfortunate” that the ABI opposed compulsory medical reports for a whiplash claim.

“It is unfortunate that the ABI should argue that action to tackle fraudulent and exaggerated claims, by insisting on medical examinations, will increase premiums,” it wrote. “We would have hoped for a firmer commitment from the industry to driving out fraud.”

The report said that savings on cutting out fraudulent claims should outweigh the increased costs incurred through the compulsory provision of medical reports.

The TSC argues that insurers making compensation offers prior to obtaining medical evidence is one of the causes of an increase in fraudulent and exaggerated bodily injury claims in the motor market and backed the government’s proposed ban.

However, LV= claims director Martin Milliner said this was not a practical solution in the current marketplace and agreed with the ABI that premiums would increase as a result of this ban on pre-medical offers.

“The principle of stopping the practice of insurers settling personal injury claims before the claimant has undergone medical evaluation is admirable, but it is completely out of touch with what behaviours are operating in the personal injury market place today,” he said. “Such a suggestion would, in fact, drive up costs and therefore premiums and give even more power to claimant lawyers in what is an already imbalanced process.”

Whiplash claim deadline should be cut

The committee argued that the time allowed for making a whiplash claim should also be reduced to help deter fraudsters.

“Problems caused by claims for injuries sustained months or years ago could be ameliorated by reducing the period in which claims can be made or by requiring firmer contemporary evidence of the impact of the injury,” it wrote.

Ageas UK chief executive Andy Watson backed the time reduction.

“We urge the government to do more to crack down on fraudulent and exaggerated claims by reducing the amount of time permitted to make a claim and for stronger contemporary medical evidence to be presented,” he said. “Allowing three years for people to claim for whiplash on flimsy evidence is an open invitation for unscrupulous companies to encourage fraudulent claims. The honest motorist ends up paying for this through higher premiums and it cannot be allowed to continue.”

A Direct Line Group spokesperson said there needed to be tighter timescales on making a minor injury claim. The insurer is calling for a 90-day reporting period to defendants.

“Those who are genuinely injured have the right to compensation. However, these measures will help identify those truly in need versus those making bogus injury claims. We think that the report highlights some very valid points and will help to increase the government’s momentum on certain areas such as medical reporting,” the spokesperson said.