Motorists who have sustained short-term personal injuries in road accidents should only be compensated with rehabilitation in order to cut an estimated £900 million from the current annual £2 billion cost of whiplash claims in the UK, says Aviva.
The insurance company has also said that a further £500 million could be saved by raising the small claims track limit to £5,000 and banning referral fees for vehicle recovery, car repairs and car hire.
If implemented, Aviva says that the controversial recommendations, published in a report called Road to Reform: Tackling the UK’s Compensation Culture, would ensure that motor insurance remains affordable for UK’s 23 million motorists.
Maurice Tulloch, chairman of Aviva Global General Insurance and CEO of the company’s UK & Ireland General Insurance operation, said that if the UK was serious about reducing the cost of motor insurance for the long term, then it was “clear” that it had to address the way it compensates minor whiplash.
He said that only using rehabilitation to treat genuine, minor injuries, which would be paid for by insurers regardless of whether the customer is at fault or not, would tackle fraud and ensure that all injuries were treated fairly.
He also said that the current system offered financial incentives for PI lawyers, claims management companies and fraudsters, which continued to inflate the cost of motor insurance.
The Association of British Insurers (ABI) has calculated that more than 475,000 whiplash claims were made in 2013, costing around £90 on the average motor insurance premium and analysis from Aviva’s claims data for 2013 shows that 94% of all personal injury claims from a motor accident are for minor whiplash-type injury claims. In contrast, says Aviva, it is estimated that whiplash accounts for just 3% of personal injury claims in France.
“Aviva does not believe that the UK has the weakest necks in Europe. The stark difference between the number of whiplash claims made in UK compared with the rest of Europe shows that it is not British necks, but its law and regulation that is weak,” said Tulloch.
“We are asking the Government to look into our proposed ‘care, not cash’ approach for minor whiplash claims to help minor injury victims get the support and treatment they need, while cutting the cost of motor insurance for all of us.”
Andrew Pemberton, director of Argent Rehabilitation and chairman of the UK Rehabilitation Council, welcomed Aviva’s proposal in relation to rehabilitation, saying that the idea was a “game changer”.
“Too many innocent victims with genuine injuries are left to fester as valuable rehabilitation treatment is often delayed or not easily accessible,” he said.
“Early treatment can be essential for the victim’s quick recovery and reduce the potential for injuries to become chronic. The main focus should be rehabilitation rather than cash for minor injury victims.”