Insurers up in arms over car accident claim figures

Industry news roundup: week ended 28 Apr 2014:

The British insurance industry has had it with the state of the car accident claims sector amidst complaints that crash for cash schemes are running rampant.

If there’s anything the insurance industry hates – especially the car insurance industry – it’s paying out on accident claims. The occasional road traffic accident happens of course, and it’s part of doing business, but some insurers are apparently convinced that there’s a major fraud problem when it comes to things like whiplash claims and other crash for cash scams.

Well, this week new data was released by major insurer Aviva saying that it has evidence that there was almost 20 per cent more fraud last year than there was the year before. Aviva blamed packs of roving gangs perpetrating the crime and also complained that there just wasn’t enough to deter criminals from engaging in the behaviour.

Now whether or not this is accurate is really anyone’s guess. I mean an insurer will do pretty much anything and everything to reduce the amount of money they pay out on an annual basis to policyholders, so people making road traffic accident claims are obviously going to be scrutinised. A large problem is indeed that there’s no real deterrents in place, but this may be changing soon as well thanks to another news story I read this week concerning how one insurer is actually offering 10 per cent off the cost of annual cover if they fit a dashboard camera to their car to capture the details of any accidents they happen to be involved in.

Part of me thinks this is a good idea in that a motorist can prove though dashboard camera footage that they really weren’t responsible for an accident that they were involved in. At the same time, do we really need more cameras watching our every move? The number of CCTV cameras in the UK alone is massive and I would really like to have a bit of privacy once and while. That 10 per cent discount seems paltry in comparison, especially if it’s the price of giving up our freedom. Besides what’s to stop insurers from keeping an eye on us at all times and not just during accidents? I don’t need them raising my insurance premium because they catch me occasionally exceeding the speed limit or braking too hard. Nosy bastards!

Here’s why the idea of a ‘compensation culture’ is bollocks

Industry news roundup: week ended 21 April 2014:

The results are in: not just one but two reports made public this week have revealed that the idea of a ‘compensation culture’ is utter and complete bollocks.

Right, so this is the last time that I really want to discuss how personal injury solicitors aren’t actually robbing the taxpayer blind or pillaging overworked insurance companies by drumming up spurious accident claims: the injured need personal injury compensation to make themselves whole after a particularly nasty accident. One report found that when it comes to loss of earnings due to an accident or injury, a whopping 81 per cent of claimants reported needed those damages awards in order to offset at least a portion of their costs or lost earnings.

It doesn’t necessarily have to be a catastrophic injury that changes your life forever either; many times it’s a temporary disability that leads to some time off work without pay. However, with the current economy still being what it is all too many Brits live pay cheque to pay cheque, and even a few weeks’ worth of lost wages can lead to serious financial difficulties. The survey found that nearly 3 out of every 4 people dealing with partial or total loss of income found that they were in even deeper after their personal injury as bills began to pile up and late fees began to accrue, so it’s not like these injured are living high with their feet up on their coffee table and counting their money after their fraudulent whiplash claim.

On top of that, there was even more evidence this week that there’s a serious disparity between those injured and then receiving a compensation award and those who don’t. In fact, the Association of Personal Injury Lawyers released figures detailing how more than 8 out of 10 claimants don’t receive even one red cent after a work accident claim.

There’s many reasons why these poor people can’t pursue claims, but the most glaring one is that they simply can’t prove that the negligence of someone at work – most notably their supervisor or employer – was responsible for the injury. Many times there’s an access to justice problem that these poor folk encounter as well, especially with regulatory changes that have limited Legal Aid access for many – and no win no fee solicitors can only go so far.

So yes, that’s it: the lion’s share of injured never make claims, and those that do make claims and win them are in absolute need of the funds to make themselves whole. Does that mean fraud is nonexistent? Of course not – there’ll always be some bastards out there ruining it for the rest of us. But can we stop trying to make it look like every claimant is a blight upon society simply for requesting compensation for the injuries they’ve sustained?

More local councils in hot water due to accident claims

Industry news roundup: week ended 14 April 2014:

Last week was all about injuries sustained by schoolchildren; this week it’s a broader look at how local councils find themselves in accident claim trouble.

Let’s start with Cornwall Council. Did you know that over the past four years it’s paid in excess of £780,000 on personal injury claims? Whether it’s slips and trips caused by potholes or injuries caused by uneven or icy pavements, the local authority has been haemorrhaging cash by the shedload. Nearly £207,00 alone was paid out on personal injury claims in 2013, and there seem to be no signs of slowing down – though of course Cornwall Council has tried to downplay it by remarking that the compensation awards are supposedly unde control.Two Devon councils have paid out about £2.5m over four years to compensate people for personal injury after incidents such as tripping on pavements.

Meanwhile, the past four years have been just as rough – if not worse – for other local councils, especially across the South. In fact between what Torbay Council and Plymouth City Council have paid out the total legal bill has been holding strong at around £2.5 million, with both unitary councils paying out a maximum of around £105,000 on any single injury claim.

Now most people will cry and point and say that this is exactly what they’re talking about when they say there’s a growing compensation culture in the UK. To that of course I say bollocks – these local authorities are as careful as they can be when it comes to minimising their exposure to spurious injury claims. The true problem is that there’s just so much territory to care for and simply not enough in funds or staff to ensure that every pothole gets filled and every rough patch of pavement gets mended. As high as these payouts seem, they could have been much higher.

At the same time there could be a bit of truth to the whole compensation culture myth. For what it’s worth, individuals do tend to make claims more in times of economic uncertainty than not. Even today, several years past the initial credit crisis and resultant economic downturn, the effects are still being felt keenly enough to create a distinct ripple of fear and resentment.

Local councils hit hard after school accident claims

Industry news roundup: week ended 7 April 2014:

It never rains but it pours when it comes to accident claims, especially those that local councils have been enduring lately due to injuries in schools.

In fact, over the past five years alone Doncaster Council has had to pay £33,000 in personal injury compensation to pupils suffering a myriad of injuries. There were a number of successful claims for all types of injuries, such as a slip-and-trip that resulted in a £1,250 payout – prompting industry experts to warn that there needs to be better training programmes when it comes to school staff.

Of course, things are even worse just an hour north on the A1, where another report found that North Yorkshire County Council has has ended up some £68,000 poorer, again for injuries to pupils. 10 per cent of the injuries were caused by defective equipment of all things; nearly 18 per cent of the payout was directly due to PE lesson injuries, with the remainder due to slips and trips, according to a recently filed Freedom of Information request.

Now certainly many of you are thinking one of two things: either there’s obvious proof of compensation culture run amok, or that there’s obviously much more supervision and training needed in local schools. Honestly if you ask me I’m highly reticent to admit any sort of compensation culture rearing its ugly head. In fact I’ve always thought that’s more of a myth perpetrated by insurance companies more than anything else as a ploy to lobby for more strenuous legal reforms in order to limit exposure to liability on the part of the insurance industry. No, what I truly think is going on here is that there’s just not enough quality training and oversight for these school staff members and as a result pupils are getting hurt left and right.

Let’s be honest here: I’m not blaming school staff members in the slightest. The faculty and staff of a school can only do so much on their own without support from the local authority, and it’s when local councils leave these staffers high and dry by not providing proper equipment and training that we see injuries – and personal injury claims – go through the roof. So in a way these councils are reaping what they have sown. Of course it’s all taxpayer money in the end so no one really wins, do they?