Personal injury claims shot up last year, increasing by a staggering 18% according to national statistics. Despite a general fall in car damage claims and accidents, figures from the Institute and Faculty of Actuaries found that UK claim rates in certain North West hotspots have overtaken some of the most litigation-crazy parts of the United States.
Accidents down but claims up
The figures also showed that the number of accidents involving cars that gave rise to third party claims fell 11% between 2010 and 2011. The institute said that this was largely down to fewer motorists on the road as a result of rising petrol costs and due to cutting out non-essential journeys. However, despite this, the number of Britons who claim to be suffering from whiplash has increased by 18%, which is the highest ever recorded.
The figures and research also illustrate a direct correlation in between where claims management companies operate and where the highest number of claims are made. Most bodily injury claims last year came from people in North West England, with the whiplash hotspots including cities such as Manchester, Birmingham and Liverpool, as well as parts of East London. At the opposite end were cities such as Cambridge, Aberdeen, Dorchester, Exeter and Kingston-upon-Thames.
Legislation is soon to affect the way that claims companies can conduct their business so that the big rise in bodily-injury claims last year may have been a last ‘hurrah’ for claimants, as David Brown, the chairman of the Institute has added: ‘The increase in costs to insurers because of the rise in bodily-injury claims is likely to result in a rise in motor insurance premiums for drivers.
‘The clear correlation between claims management companies’ office locations and the ‘hotspots’ for bodily injury claims suggest that the two are interlinked.
‘We expect to see legislation coming soon which will affect the way in which claims management companies do business, which may account for the significant increase seen in 2011. It is possible this is a last hurrah.
‘In 2010 the worst areas of the UK overtook the worst areas of the US in terms of the proportion of accidents involving bodily injury. It is disappointing to see this trend not only continue, but worsen in all regions with the exception of Scotland.’
Effect on insurance
Following an investigation into the rising cost of car insurance, the Transport Committee is calling on the government to raise the threshold for receiving compensation in whiplash cases and crack down on the compensation culture in the UK.
By compensation culture, the Transport Committee is referring to individuals who are too litigation friendly in that they view seeking a claim as a means of receiving some fast money. And while such acts can be linked to the recent downturn and slump in the economy, such claims do have an adverse effect because the cost of car insurance will increase significantly as it has done so.