Car insurance giant Aviva has proposed that drivers involved in car accidents should be legally required go to an ‘at fault’ insurer first before making personal injury and whiplash claims, which continue to cost drivers billions of pounds.
In its latest ‘Road to Reform’ report, the insurer is calling for a legal requirement for personal injury claimants to contact the ‘at fault’ insurer in the first instance, rather than going to third party claims management companies or personal injury lawyers.
Whiplash claims costing drivers £1.5bn
The report, which has been published ahead of the Ministry of Justice’s Whiplash Consultation, suggests that cutting out third party legal fees would reduce the cost of personal injury claims by 50%.
According to Aviva, this is adding an estimated £1.5bn in excess costs for insurers, pushing car insurance premiums higher. The insurer suggests that if its proposal was accepted, this would reduce premiums by £60 a year for the average driver.
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Government whiplash consultation
In December 2012, Justice Secretary Chris Grayling launched a consultation on new measures to reduce the number and cost of whiplash claims, including those that have been launched by ‘no win, no fee’ companies.
This has been in response to an increase in whiplash claims in the last five years, which have been pushing up the cost of the average motor insurance policy.
Whiplash claims up by 60%
According to the government figures showed a 60% rise in personal injury claims related road accidents since 2006, despite a 20% reduction in the number of reported accidents over the same period and vehicles becoming safer over the same period.
As result of the consultation several law changes are due to come into effect in April 2013. This includes:
- Rebalancing no-win no-fee deals so losing defendants will no longer have to pay a success fee or legal insurance premium to the claimant’s lawyer
- Banning referral fees where companies can profit from selling on someone’s personal injury claim
- Stopping claims management companies from offering money or goods as an incentive to make a claim through them.