Insurers May be Left with a £400 Million Hole in their Finances

It will come as no surprise to the majority of motorhome insurance providers that a report collated by a group of actuaries has come to the conclusion that claims for personal injuries following a road accident are rapidly getting out of control.

The report from the Actuary Profession warns Government and insurers alike that the present situation cannot continue, and action must be taken quickly. The report points out that although road accidents fell by 11% in 2011, claims for personal injury actually went up by 18%. The authors of the report estimate there will be an additional cost to the insurance business of around £400 million because of the claims, and the great majority of the money paid out will be for an injury that is almost impossible to prove.

Whiplash injuries are by far the most common cause of a claim and Government agencies and insurers are united in believing that a reduction in such claims is absolutely vital if motor insurance is to remain financially viable for the mainstream of drivers in the future. Many believe the medical diagnosis of the condition for insurance purposes needs to be changed. Actuaries are absolutely certain if change is not brought about, then the only outcome can be more expensive motor insurance policies for all. The report highlights higher fuel prices as being the main reason for such a fall in accidents, explaining that motorists made fewer journeys because of the financial implications. The rise in claims is put down to the growing industry centred around accident management.

It is hoped that the report will put some urgency into Government plans to revolutionise practices surrounding road accidents, and in particular the burgeoning business conducted by law firms who are quick to start the legal ball rolling knowing they will benefit from any claim. The Government are also keen to stop insurance firms and accident management companies from passing on personal details of motorists caught up in accidents.

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