Compensation Reform: The Big Insurance Lie
The Government is looking at scrapping the right to compensation for whiplash injuries in England & Wales.
The Big Lie perpetuated by the insurance industry through their lobbyists, the Association of British Insurers, is that whiplash claims have risen by 50% over the past decade fuelled by fraudulent claims costing the insurance companies about one billion pounds a year.
The Truth, supported by the Government’s own statistics produced by the Department for Works & Pensions is that whiplash claims have fallen by 41% since 2011.
Despite the decreasing number and the cost of whiplash claims both Motor Insurance Premiums and the profits of the insurance companies have continued to rise.
The Justice Secretary Liz Truss has stated “for too long some have exploited a rampant compensation culture and seen whiplash claims as an easy pay day, driving up costs for millions of law abiding motorists. These reforms will crack down on minor, exaggerated and fraudulent claims”.
Mary Elizabeth Truss was appointed Secretary of State for Justice and Lord Chancellor in 2016. She has no legal experience or qualification.
The inexperienced Minister is set to deny millions of road user’s access to justice and the right to claim compensation merely to allow the insurance giants to increase their already vast profits.
1. Car Insurance is a compulsory purchase – there are 30 million + vehicles on UK road and it is a market worth more than £15bn p.a
2. Car Insurance premiums are rising – although prices fell in 2012/2013, they have increased 9.2% in the 12 months to the end of September 2015
3. Accident compensation is at a record low – annual car insurance claims pay-outs have fallen 29% since 2010 and are now at their lowest level for 9 years
4. Low claims costs are fuelling big profits and staggering dividend payments – Direct Line and Admiral have paid out 1.65 billion in dividends in the last 3 years (equivalent to £221.00 per policy holder), driving their share prices to record highs
5. Car Insurer fraud figures don’t stack up when asked about prosecutions, the insurers could sight only 84 convictions in a 2 ½ period
6. ABI’s own data shows the amount paid out annually by motor insurers has fallen from £8.302bn in 2010 to £5.796bn last year – a decrease of £2.506 bn.
7. The ABI’s own data, published 16th November 2016, shows 99% of private motor claims were successful in 2014/2015 compared to 84% of home insurance claims and 87% of travel claims.
8. Figures produced by the Department of Works and Pensions Compensation Recovery Unit (CRU) show a 41% decrease in registered whiplash claims since 2011.
Mark Wilson, Chief Executive of Aviva, another giant in the UK car insurance market, said in the Times on 21st December 2015, the proposed changes – now being considered by the Government would “end the fraud pandemic” whilst other ABI lobbyists have talked of “a crisis”.
There is no fraud pandemic. There is no crisis.
What there is, is a highly organised campaign by the Insurance Industry to scrap an individual’s right to compensation in order to feed their own corporate greed and increase already rising profits and dividends.
Tom Jones Head of Policy at Thompsons Solicitors has said :-
“The latest information [from] the ABI completes a picture they would rather not have out there – of a booming industry with healthy profits and cash reserves, paying out huge dividends. This isn’t a sector buckling under the weight of “fraud” as they would want the British public to believe. If there is fraud, it should of course be tackled but the issue is being cynically manipulated. Fraud is being repeatedly used as a battering ram for reform that would actually mean only more profit for insurers. The insurers are taking the British public for fools – they haven’t defined fraud, they haven’t provided any independent evidence that fraud actually exists at the level they claim and they aren’t reporting it to their Shareholders as a material risk. In our view, fraud is being cynically exaggerated to attack the rights of honest motorists and to justify premium increases. It is high time the insurance industry stopped their manufactured hysteria about fraud and concentrated on providing greater transparency so consumers can see whether ever growing premiums are justified”
Insurers are no different from Bankers. They are not your friend. They exist solely to make a profit at your expense.
It is the opinion of PHC Law Ltd that the insurance industry and the ABI have cynically manipulated the Secretary of State for Justice and Lord Chancellor together with the media to embark on a crackdown on whiplash related compensation claims thereby denying millions of innocent motorist’s access to justice.
The Government has invited “consultation” upon its erroneous proposals. If you agree that the Principal of access to Justice for all takes precedence over corporate greed then please show your support for this article by lobbying your local MP or contacting direct the Secretary of State for justice and Lord Chancellor.
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