Hope you've got an extra £50 - false claims are driving premiums up
I've got some bad news for you: the number of personal injury claims made after road traffic accidents went up by 18 per cent last year, which could lead to a £50 premium rate hike for you and I so our insurers can recover their costs.
Of course, there's more to worry about, as a substantial number of these car accident claims are likely false, according to the Actuarial Profession, especially since the number of accidents that occurred last year actually fell by 11 per cent. Fraudulent claims, especially whiplash injury claims, have already had a serious impact on the insurance industry over the past few years; that £50 rate increase is following on the heels of an additional £90 rate hike after it was revealed that there were 1,500 whiplash claims made on a daily basis over the course of 2011, which resulted in a massive £2 billion personal injury compensation bill.
The Association of British Insurers predicted the £50 rate hike for the coming year, though a spokesperson did say that it was difficult to pin down exactly how much more we'll all be paying as a result of fraudulent whiplash claims. However, the spokesperson wasted no time in saying that premiums would experience 'a knock-on effect' from the increase in the number of claims, adding that the massive amount of fraud within the legal system is one of the biggest problems the insurance industry has right now.
The lion's share of these fraudulent claims seem to be coming from the North West, according to official figure, with Manchester and Liverpool being a major source of these resource-draining injury claims. The Midlands was also found to be a hotspot, with Birmingham being one of the worst areas as well.
