7th June 2014
Insurance fraudsters will think twice about exaggerating claims for whiplash and other injuries after a change in the rules mean those found to be lying about a claim will receive nothing.
Previously there was no consequences if a person was found to have exaggerated or invested injuries, as although the claim may be reduced there would still be a pay-out.
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However, new legislation overseen by justice secretary Chris Grayling will mean individuals who lie about their injuries, even if they were genuinely involved in a car accident, will not receive anything.
‘We are making sure we do our bit to help drivers with the cost of running a car, and putting money back in their pockets,’ said Grayling. ‘Insurance premiums have fallen by record amounts over the past year as we have turned the tide on the compensation culture but there is more to do. We are continuing to go after the fraudsters who force up cost for honest driver.’
Insurer LV= said the new rule would put an end to cases such as that of Minaxi Shah, who claimed in 2005 that a car accident left her severely disabled, unable to work and in need of care between five and eight hours a day. Due to her disability not only did she receive compensation from LV= but also claimed disability benefit – the total sum of her claims were in excess of £650,000.
LV= was later tipped off that Shah was not disabled and was in fact working and in 2011 she was found in contempt of court and given a custodial sentences. However, under the old rules Shah was still awarded compensation for the injuries she had sustained in the accident despite her exaggerated claim.
Under the new rules, Shah would have no grounds to claim any compensation.
‘This new legislation fundamentally changes the game and will help put an end to this mentality whereby a claimant has nothing to lose by inflation a claim,’ said LV= claims director Martin Milliner.
‘If a fraudster risks losing their entire pay-our due to exaggeration, this will level the playing field for insurers and claimants and speed up justice for those with genuine injuries. Offering up-front incentives for personal injury claims has fuelled Britain’s compensation culture and driven up the cost of car insurance for all honest motorists.’
Under the changes to insurance claims, personal injury lawyers will also be prevented from offering incentives to accident victims to claim. These incentives can be anything from cash to an iPad, although only lawyers and not compensation claims companies will be banned from offering inducements.
Last year LV= surveyed accident victims and found almost a third, 29%, who had claimed compensation for personal injuries following a car crash had exaggerated their injury to get compensation. One in 10 made up the injury entirely in order to receive cash.
The research showed claims companies also played a large part in the compensation culture surrounding car accident.
One in 20 people were contacts by a claims management firm or personal injury lawyer within just two hours of their accident but 24% of claimants said they would not have made a claim if it hadn’t been for the pressure of these companies.
Of those who made a claim, nearly half, 48%, said they were pressured into doing so by a claims company specialising in personal injury.
Other measures coming into force include improving medical assessment and making sure they are conducted by independent accredited professional as well as setting fixed fees for medical reports. The rules will also prevent the practice of settling whiplash claims without confirmation of the claimant’s injury.
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