The UK’s biggest insurer Aviva has called for a new process that would force victims to put their claims directly to the insurer of the driver who caused the crash. It suggested that the system would cut out middlemen who inflate the costs of claims.
Also it said that motorist’s premiums could be cut by an average of £60 a year by changing the system of whiplash claims.
However, one legal group said that any change where a victim is forced to make his claim directly with the insurer of the driver would leave victims vulnerable.
The Association of Personal Injury Lawyers said that entrusting the injured person completely in the hands of the guilty party’s insurer would create deep conflicting interests.
An independent advice was key in preventing such a conflict and ensures a fair outcome for the injured person it said.
Whiplash claims were a major factor behind the rapid rise in the price of motor cover which amounts for 80% of injury claims, and most go through lawyers who have been charging sizeable fees Aviva said.
Costs could rise even further as a result of referral fees paid by lawyers and claims management firms to breakdown firms, brokers and the insurers themselves, in exchange for providing information about accident victims.
Aviva’s claims come at time when the government has already given notice that it will ban referral fees and limit legal fees.
Aviva suggested that all this accounted for £118 of a typical motor insurance premium.
However Aviva believes that the cost could be cut further by putting a claim first to the “at fault” insurer. The victims should be then given independent clinical advice and there should be a standard tariff of damages focused on care, rather than cash payments, according to Aviva.
Some 550,000 whiplash claims are made each year. Aviva estimates that up to 300,000 cases could be dealt with under its proposed system.
The claims director at Aviva says that its primary concerns were that injured parties receive care and compensation as quickly as possible, and that all motorists benefit from a reduction in the excessive costs that have built up in claims over the past few years.