Whiplash - Has Your Premium Really Gone Down?


Changes to the law regarding personal injury compensation resulting from whiplash have allegedly contributed to motor insurance premiums reaching a five year low.

Car Crash Whiplash

The reforms were initially made under the idea that it would bring down insurance premiums, through combating fraud. But has your insurance premium actually gone down, and if it has, is this been because of the changes in the law?

Here is what the reforms mean for those seeking accident claims advice.

Whiplash Law

Towards the end of last year, the Ministry of Justice set in motion changes that affect how whiplash compensation claims are made. If, after an accident, you believe you have suffered from whiplash, your claim will be assessed by a medical panel. This medical panel will be very different to the usual way experts are appointed in personal injury claims because the panel won't be selected by either party, and won't be limited to doctors. It is believed that when fully implemented, the panel will have lawyers and insurance companies on it too.

Correlation and Causation

As the changes in the law develop, reports suggest that car insurance premiums have declined. Many have suggested that this is because of the changes to the whiplash claims process, however correlation does not mean causation.

Other possibilities for the fall in price include:

  • Competition between insurance companies forcing prices down
  • Changes in the law to the arrangement where damaged vehicles are repaired and courtesy cars are hired

Third Party Capture

This is where an insurance company will contact the person believed to be the victim of an accident and offer to make a settlement 'without getting lawyers involved'.

The problem with these settlements, for genuine victims of accidents, is that they are often far lower than what they can get when they contact a personal injury solicitor to pursue a claim.

Another problem with the system of third party capture is that it actively encourages fraudulent claims. It has been easy for infamous 'crash for cash' gangs to deliberately cause an accident and then receive a quick, easy compensation package through this practice by insurance companies.

If this practice were to end, perhaps we would see fraud reduced even more, saving honest people money, and allowing those injured to be treated more genuinely.

What Do the Changes in Whiplash Compensation Claims Mean to Me?

The reforms haven't been properly put in place yet, and the details are yet to be fully finalised. Having medical experts involved in the whiplash compensation claims process is definitely not a bad thing in itself. However, it is important that these panels are free from bias, and equally important that they do not unduly distress victims of accidents.

Achieving both of these things will be difficult.

Sarah-Jayne Bell, associate for Simpson Millar LLP agrees that there may have been a slight reduction in insurance premiums, however, a high number of those injured in an accident are now paying a percentage of their damages to pay the shortfall of costs that have been taken from the solicitor.

She also notes that, "The further attempt to increase the small claims threshold is now leaving claimants without legal representation and access to justice. There has been an approximate 9% drop in insurance premiums, which is low considering the costs implications of the Jackson reforms."

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