Cheapest car insurance news
19/11/2008
Premiums driven upwards by whiplash claims
Cheap car insurance is being forced to higher levels due to a rising number of claims for whiplash injuries, a new report just published has revealed.
According to the AA and Association of British Insurers (ABI), the cost of whiplash claims is driving up premiums by about £66 - which is around 14% for average car insurance quotes.
Whiplash claims have grown by about 25% during the past five years with some 1,200 of these claims now being made each day in the UK.
Some 430,000 people claimed for whiplash compensation last year with the insurance industry having to foot a whiplash bill that totalled £1.9 billion.
The AA said whiplash injury was becoming an increasingly important factor in future premium increases.
The company's insurance director, Simon Douglas, said, "This is more than twice the cost of claims for accidents with uninsured drivers."
It was reported that many claims can be scams with many low-speed accidents being deliberately staged by drivers. Lawyers allegedly then cash in on the compensation culture by encouraging people involved in any crash to claim for whiplash injuries.
Whiplash is said to be undetectable. When insurance firms cannot defend such claims, they must make automatic payouts often of up to £8,000 per person. A car load of five people can lead to a bill of £40,000.
Genuine claims and the cost of scams are then forcing up the price of cheap car insurance.
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