Car insurance: MPs to investigate impact of whiplash claims

Car accident Whiplash accounts for an estimated 70% of road accident personal injury claims

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MPs are to investigate the extent to which claims for whiplash injuries are pushing up the cost of car insurance.

The Commons Transport Committee said it wanted to examine suggestions that rising payouts meant the UK was now the "whiplash capital of the world".

It will look at the impact fabricated and exaggerated claims have on premiums and what can be done about them.

Ministers say action is needed to curb the 60% increase in road-related personal injury claims since 2006.

Whiplash is characterised by the NHS as a neck injury caused by a sudden movement of the head forwards, backwards or sideways.

Claims for such injuries have soared in recent years despite improvements in vehicle safety and a sharp reduction in the number of reported accidents involving personal injury.

The cross-party committee has already held two inquiries into the rising cost of car insurance in the past three years.

But now it plans to focus specifically on claims for whiplash injuries - of which there were more than half a million last year - and how they affect what drivers are paying for insurance.


Insurers say there has been an "epidemic" of claims - with 1,500 made every day - and their £2bn annual cost is adding £90 to the average premium.

Start Quote

Whiplash is notoriously difficult to diagnose, which means that for too many people it has become the fraud of choice”

End Quote James Dalton Association of British Insurers

In a consultation document published in December, the Ministry of Justice set out ideas for action, including creating new medical panels to improve diagnosis of whiplash injuries and allowing more cases to be challenged in the small claims court.

The committee wants to know whether the government's proposals will reduce the cost of premiums and what proportion of the £90 figure is attributable to inaccurate or fraudulent claims.

It will also study the likely impact of the proposals on genuine claimants and what else can be done to bring down premiums.

Louise Ellman, the Labour MP who chairs the committee, said the issue was "difficult", but she and her colleagues wanted to weigh up all the arguments about the best way forward.

"It is vitally important for policymakers to understand the reasons for the very high cost of motor insurance, especially for young drivers and to take steps to bring that cost down," she added.

"Whiplash claims undoubtedly play a part in driving up the cost of motor insurance but access to justice for injured people must be preserved."

'Fraud of choice'

Former Justice Secretary Jack Straw has mounted a high-profile campaign against what he says is the large increase in dubious whiplash claims, tabling a private member's bill in 2011 urging reform of motor insurance.

The Association of British Insurers has called for whiplash injuries to be assessed by an accredited medical expert, trained in the latest diagnostic techniques and able to take into account the circumstances of the collision rather than the claimant's reported symptoms.

Start Quote

We continue to work with young people, the insurance industry, and other key partners in addressing this important issue”

End Quote Stephen Hammond Roads minister

It also says a set level of damages should be prescribed for whiplash claims and any exaggerated claim should be thrown out entirely.

"Insurers want to make it simpler and quicker for genuine whiplash claimants to get fair compensation," says the body's assistant director of motor and liability James Dalton.

"But whiplash is notoriously difficult to diagnose, which means that for too many people it has become the fraud of choice."

The government said it had taken action to help bring down insurance premiums by banning referral fees, reforming no win no fee rules and cracking down on fraudulent whiplash claims.

"In addition, we are considering several options to ensure that newly qualified drivers are properly prepared and drive safely, allowing insurers to reduce premiums for this age group," Roads Minister Stephen Hammond said.

"We continue to work with young people, the insurance industry, and other key partners in addressing this important issue."


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  • rate this

    Comment number 95.

    Insurers should refuse to pay out on dubious claims The scam only works because insurers do not go through the courts but just pay up as is cheaper The claims management companies and their lawyers only make money if they win and the courts are not involved jnsurers should also prosecute people making false claims for fraud

  • rate this

    Comment number 94.

    78 & 85 further.

    Besides the broader issues of a review of motor vehicle insurance costs and practice, the whiplash investigation must examine the question of the cost of personal injuries falling broadly and today, explicitly upon the NHS and state. and limited to derisory contribution to NHS expense for life long care of the injured which is vast to tax payers.

  • rate this

    Comment number 93.

    We need a minimum price set for petrol, there's too many people going out and getting smashed and costing the NHS money!

  • rate this

    Comment number 92.

    A large part of the cost is the lawyers fees.
    For all but the most serious life changing injuries, how about a simple flat payment which is arranged by someone like an insurance loss adjuster. E.g. if you are off work for 6 weeks with a broken leg you get 6 weeks average pay plus a couple of grand for the inconvenience.

  • rate this

    Comment number 91.

    In my opinion this is all part of our growing "something for nothing" culture, whether it's benefit claims or insurance claims too many people see institutions such as insurance companies as well as the government as fair game with no regard to the consequences. It's not just the bankers who are driven by greed.

  • rate this

    Comment number 90.

    I have had two rear end shunts neither my fault, both times had severer neck pain for several months. First time I didn't claim second time dam right I claimed,.Also if you are involved in a shunt not your fault their are hidden cost. After a shunt all drivers not at fault should get a fixed cost reimbursement of £1000 fixed min, rising on severity of injury no legal wrangling.

  • rate this

    Comment number 89.

    We know it's a problem, we know why its a problem, so just tell the insurers to sort it out & fine them if they don't.

    Thre is no need for MPs waste time & money setting up a committee to investigate - they should be spending their time getting us out of the fiscal mess we find ourselves in, or would that be too much like hard work for them?

  • rate this

    Comment number 88.

    I agree with SavetheUK's comments. I had an accident a few year's back - the 'approved' repair shop claimed for replacement parts they didn't even change. The other party claimed I shunted him into another car (it was a 10mph hit between the two of us). I complained to the insurance co but they didn't care. I came away with the view that everyone was out the screw the insurance companies.

  • rate this

    Comment number 87.

    The issue is that these layers are allowed to lose 9 out of 10 cases but then claim the cost of the nine lost cases against the one they won.

    I think we should look to tighten up the rules about claiming costs after a case to make sure that all expenses charged to the losing party relate to work done on that case and put in maximum per hour rates for work done by lawyers.

  • rate this

    Comment number 86.


    I have been receiving calls and texts on this subject recently and I haven't even had an accident! It is the ambulance chasers, no win no fee solicitors and the fraudulent claims that are costing us all a lot more on your insurance premiums.

  • rate this

    Comment number 85.

    Motor vehicle insurance belongs in the realm of the our National Insurance scheme, where the scale of the business and its immense revenue flow offer huge efficiencies, savings on premiums and benefit to the nations coffers.

  • rate this

    Comment number 84.

    There are real cases but there are also gangs [ many foreign]who purposely cause accidents for insurance, the innocent drivers have the hassle of dealing with insurance. There should be cameras at roundabouts to film these events. the gangs should have licence taken away for good and huge fines to pay all insurance costs. If on benefits these stopped until full payment.

  • rate this

    Comment number 83.

    "fraudulent whiplash claims" - the frauds are not the claimants, they are the claims handlers. Son's accident was not his fault and he was uninjured. When handlers sent him copy of claim he objected as it included whiplash which he did not have and had not reported. Eventually the money came through including a sum for the whiplash he denied having. It's the insurers own fault, not customers'.

  • rate this

    Comment number 82.

    The claims should be limited to medical costs incurred beyond what could have been obtained from the NHS. In serious cases there is also a possibilty of loss of earnings but only during the period under medical supervision.

  • rate this

    Comment number 81.

    I would say motor insurance is corrupt from back handers to repairs that are charged for and not required cars that are written off that should not be Insurance premiums that are charged at a higher rate just because the person is loyal to the firm The list goes on and on

  • rate this

    Comment number 80.

    Insurance is a global industry, so drivers and homeowners, here and elsewhere, are subsidising massive compensation claims in the US, for everything from asbestosis to coffee scalds.

    International action is needed to stop this US money-making scam.

  • rate this

    Comment number 79.

    Whiplash is horrible. I had it after a car I was in was hit at a junction and the driver behind hit us. I had whiplash and my spine was damaged

    whiplash is an imprecise term, your spine was damaged & there's medical evidence to prove it, others claim whiplash when there's no ephysical vidence to support it & get more money than you did

  • rate this

    Comment number 78.

    The Insurance industry cries wolf and offers a good example. l also shout complaint at the motor insurers and want their books and finances indepently audited and a long hard look taken at their profits and funding of new capital requirements. See to it please, Prime Minister.

  • rate this

    Comment number 77.

    Is this to do with George Osbornes alleged relationship with a dominatrix called Miss Whiplash????

  • rate this

    Comment number 76.

    Had an accident? Lets us see how much compensation we can get you. We all know who to blame for these statistics.


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