Insurance companies blame car accident victims for rising premiums – again.

Earlier this month, Mark Allen, fraud and financial crime manager at the Association of British Insurers, said:

“The extent to which people think it is acceptable to lie to the insurance industry is shocking. All law-abiding motorists end up paying the bill for fraudsters who invent and exaggerate injuries to claim compensation they are not entitled to.”

He went on to say that:

“The Government’s reforms to shut down the whiplash gravy-train cannot come soon enough and in the meantime, people should be warned that the insurance industry is determined to root out and prosecute those who try to take advantage of the system.”

This often repeated mantra is trotted out every year by the insurance industry but it had recently been robustly challenged in the national press. An article in The Independent, in March, written by Chief Business Commentator James Moore quoted from a study carried out by Capital Economics, a respected city consultancy.

Capital’s reported:

“It is commonly believed that motor accident rates have fallen as personal injury claims have risen. on that: This is a false impression. The downward trend in motor accidents recorded by the police reflects the reduced likelihood of an incident being reported rather than of reduced incidents overall. A key contributing factor to this is the decline in the number of police traffic officers.”

The study continued:

“There are other explanations. With the insurance business model reliant on firms generating investment returns on their reserves and capital, low-interest rates following the financial crisis have been partly responsible. It is a mistaken belief that ‘whiplash’ claims have been responsible for rising motor insurance premiums in the United Kingdom in recent years.”

We have been asking the insurance industry the same very simple question for years; “Why do insurers pay out on claims known to be fraudulent?” It is everyone’s interest to root out the small number of fraudulent claims.

To date, we haven’t had an answer, but despite the industry’s intransigence on this point we will continue to fight for the rights of legitimate road traffic car accident victims to be compensated for their injuries without being vilified in the media.