A report from the Association of British Insurers has found that whilst the number of fatalities and serious injuries arising out of accidents has fallen significantly, the number and value of personal injury claims has increased sharply from £8.8 billion in 2006 to an astonishing £9.6 billion in 2009.
The number of road traffic accident fatalities fell by 14% between 2007 and 2008 (down from 2,946 in 2007, to 2,538 in 2008). During the same period, the number of fatalities and serious injuries reported to the Police fell 7% to 28,572.
What accounts therefore for the increase in the numbers of claims? The two main factors appear to be an increase in the nature and extent of the compensation culture in the UK and fraud. Simon Douglas from AA Insurance believes that the rise in the numbers and value of personal injury claims is accounted for by the fact “that those involved in accidents are much more inclined to make personal injury claims, even for non-serious injuries such as minor whiplash cured by painkillers over a couple of days, which in the past, people would have just not bothered to claim for”.
Another potential factor is the increase in the number of fraudulent claims. The most faked type of claim is a whiplash injury caused by a rear end shunt. Indeed, a survey of GP’s by Liverpool Victoria Car Insurance found that 98% of GP’s stated that they had seen a patient whom they believed was exaggerating an injury in order to claim compensation, whilst 85% said that they had seen a patient whom they believed was completely making up an accident/injury in order to bring a claim. The study found that 88% of the suspected fraud related to whiplash type injuries. Claims for stress and depression are also another common type of faked claim, as are slips and trips, particularly pavement trips. Dr Harry Brunjes said of the findings that “the medical profession always has been, but is increasingly sensitive to individuals who could potentially defraud their employer or insurer as a result of exaggeration or even fabrication of clinical signs and symptoms. As a profession, it is important that best practice is maintained and medical certification is only issued for those with genuine diseases and injuries and not those with inappropriate illness behaviour, whatever its manifestation.”
The Insurance Fraud Bureau report that fraud pertaining to whiplash injury claims (known as ‘crash for cash’ fraud) costs the insurance industry about £125 million per year, with fraud overall costing it £350 million per annum. This has a knock on effect for insurance premiums. In terms of ‘crash for cash’ fraud, criminal gangs have been known to stage car crashes and then bring fraudulent claims in relation to them. Glen Marr from the Insurance Fraud Bureau states that “We have a list of 125 hotspot areas where we know networks are operating. The higher up the list, the higher the likelihood of innocent drivers being caught…As we target areas of high activity, unfortunately…the gangs move on to new areas. So, as some postcodes come down our hotspot list, others go up. The whole experience can be very distressing and emotional for the driver [tricked into going into the back of the fraudsters vehicle] who is completely innocent, but [the fraudsters] don’t care about that. They will often target vulnerable motorists, such as the elderly, or someone on a mobile phone or who is eating. The whole business is very slick and organised. These are professional criminals who, when we do pursue cases, turn out to also be involved in drug and people trafficking and mortgage fraud. The worry is they used to only operate in very slow-moving traffic. But they are becoming more aggressive and will now slam on the brakes in much faster-moving and dangerous situations.”