Robin Selley

As the latest report from comparison site Confused.com hits the news, who really are the bad guys when it comes to whiplash?

In this latest report (http://www.bbc.co.uk/news/business-39558258), the reasons as to why car insurance premiums are rising so much are due to expensive repairs and recent government changes to injury “payouts” according to Confused.com.

Firstly, the press do like to use the term “payout” when the reality is that “compensation” is being paid, in essence to put the injured person back in the position they were in before they suffered injury and/or loss due to the negligence of another; and more importantly, to compensate them for the injuries suffered.

This is an important distinction to make and for the public to understand, in particular when the ABI complain so profusely in response to the recent cut the discount rate – a calculation used to determine lump sum compensation to claimants who have suffered life-changing injuries to ensure that they have sufficient amounts to help pay for future costs, such as an ongoing need for care.

Unsurprisingly, the ABI and several insurers complained about the risk to vast profits being wiped out as a result and again, the way this has been reported by the mainstream media and insurers shows more concern for profit than the needs of the seriously injured.

Back to the latest report from Confused.Com which found that drivers paid on average £781 on comparison sites for a comprehensive policy in the year to March 2017. They also believe that average premiums are set to rise to a record high and could pass £1,000 next year.

Other reasons given include the costs of repairs to vehicles, newer models can costs far more than their older counterparts due to the technology contained within these vehicles. It is not just a bent bit of metal or plastic, but now one that contains all sorts of electrical sensors as well.

There is also an impending rise in Insurance Premium Tax to 12%, having already risen from 6% in November 2015.

Despite the numerous promises made by the insurance companies that once changes had been made to personal injury claims (not just whiplash claims), it wpould appear that very little if anything has been passed back to the consumer.

But claims for whiplash are all a big con, right?

Yes of course there are some, a very small minority, who are looking to cheat and lie to make money. But not everyone injured in a road traffic accident is putting it on as the insurance industry would have us believe.

The reality is that whiplash hurts. It can require physiotherapy to put right and often time off work, which might be unpaid. So the injured party should be entitled to recover such losses and be properly compensated for a genuine injury.

However, the ABI and the Government would have you believe that whiplash is a fairly limited injury with little or no consequences for the injured party. They would see pay outs capped at £400 with costs limited, so those with minor injuries may struggle to find a solicitor willing to act for them. Then they are at the mercy of the insurer to pay them the correct amount of compensation.

As another recent article suggested, if the Government really wants to help motorists it should ask the competition watchdogs to take a fresh look at insurers;

http://www.independent.co.uk/news/business/comment/car-insurance-economists-debunk-industry-claims-whiplash-crackdown-will-result-in-lower-premiums-a7635836.html

According to Capital Economics “It is a mistaken belief that ‘whiplash’ claims have been responsible for rising motor insurance premiums in the United kingdom in recent years.”

As the article above suggests, the reforms to whiplash claims, are more likely to boost insurers’ profits by up to £0.7 billion per annum rather than provide any meaningful reduction to premiums for motorists. Insurers will of course revert back to the effect that the change to the discount rate will have. Could that be short lived in any event? Given that as soon as the ABI shouted in horror at the change to the discount rate, the Government jumped and announced a further consultation on how the discount rate should be set in the future, allowing just six weeks for responses to be given.

Another “fait accompli” perhaps from the Government, perhaps we can leave you to decide who the bad guys really are in all of this.

The Rise and Rise of Car Insurance Premiums