Prime Minister Holds Summit to Tackle Whiplash Claims

UK News 10 1 jpg 657952t Prime Minister Holds Summit to Tackle Whiplash ClaimsLast week, British Prime Minister David Cameron called an insurance summit that comprised of the leading players in the car insurance industry. This meeting was held in order to discuss about the whiplash claims that are currently haunting Britain, along with methods to reduce the hefty premiums that motorists are charged.

Along with ending the compensation culture and whiplash claims, the summit also assessed the innovations and technological advancements that could help in lowering premiums. This segment involved discussions on black boxes, which are being touted as the only way to rescue younger drivers from the staggering premium rates they currently pay.

Justine Greening, UK’s Transport Secretary, also attended the summit. Earlier this month, Ms. Greening had launched a crusade against fraudulent firms that engaged in whiplash claims to make their millions.

In an article written in the Mail, she said,”The cost of car insurance is bearing increasingly little relationship to the real world where motorists act more responsibly than ever and accidents really do happen less often.”

With more than 1500 whiplash claims being made on a daily basis, Justine greening said that the problem wasn’t with how residents were driving their vehicles. In fact, the accident rate in the UK is at an all-time low at present. The Association of British Insurers (ABI) placed the blame on the aforementioned whiplash claims, which have given Britain the unfavourable title of ‘whiplash capital in Europe’.

According to ABI, the whiplash claims have cost the insurance industry an annual amount of approximately £2 billion, with an average premium cost of £90 to every motorist’s bill.

According to the ABI, the whiplash claims are the reason why the average car insurance premium has risen to £410, which is an increase by 17 per cent from last year. This, despite the popularity and relatively economical prices on notable car insurance comparison sites, comes as grave news to every car driver in the UK.

Along with the general price rise, the price for young male drivers has also risen to £2,977 and female drivers have to pay an average price of £1686.With car insurance taking a major spike of 33 per cent in 2010, things look very grim indeed.

If that weren’t enough, the rampant compensation culture in the British car insurance market has become another prime mover in the rising car insurance premiums. According to Simon Douglas, director of a prominent car insurance company, the government should completely ban accident management firms and personal injury companies from engaging in cold call advertising. Such firms usually encourage, cajole and even force people involved in no-fault accidents to file personal injury claims even if they are not hurt.

“I believe that the insurance industry is committed to keeping premiums as competitive as possible, but as the gap between premium income and claims payments has widened because of soaring fraud and personal injury claim costs, premiums have had to rise for everyone,” said Mr. Douglas.

Policyholders will be hoping that Mr. Cameron and his summit members find solutions to their woes soon, otherwise even those who compare car insurance online would be headed for exorbitant premiums.