Figures have been released by the government that show how claims for whiplash fell by almost 24,000 last year…that’s a fall of 4.2%! Records uncovered by the Association of Personal Injury Lawyers (APIL) showed that for 2011/12 there were a total of 547,405 whiplash claims compared to 571,111 the previous year.
Yet, despite the decline in whiplash claims insurance companies have kept premiums at a standstill and have no future plans to reduce them. Furthermore, such companies have revealed that they receive substantial fees for passing on information about customers who have an accident. In fact, insurance giant Admiral have shown in their half-year financial report that on average they take in £7 in personal injury referral fees for every vehicle they cover. Since Admiral insures 3.5million vehicles on UK roads, this figure suggests that they earn around £24.5million each year from referral fees alone.
Other research shows that following a car accident, 65% of victims are contacted by insurers, not lawyers, to make a claim. In fact, research from the Ipsos MORI group (one of the UK’s leading market research companies) suggests that the majority of drivers who crash are encouraged to claim by their insurers. If the motorist wants to go ahead with the claim, the insurer will then sell their case to the highest bidder, thus reaping significant financial gains from the accident. This information may come as a surprise since insurance company’s claim they have to consistently raise premiums due to expensive payouts, yet; evidently this is simply not the case. They would much rather sell their customers details and pass on the duty of seeking compensation to an external agent.
Consequently, it would be thought that with all of this extra income insurance companies would finally be in a position to reduce motor insurance premiums for their customers. Although, the likely (and all so familiar) story is that they will rise or simply stay the same.