Jonathan Guy, Chief Claims Officer, shares his views on the Civil Liability Bill with Claims Media.
The UK has long been heralded as the ‘capital’ for whiplash claims, with law-abiding motorists paying the price for the ‘crash for cash’ culture for far too long. In recent years, the number of fraudulent claims has increased at a rapid rate, with the scale of the problem culminating in around £35 being added to the average insurance policy.
Reform is on the horizon
Luckily for honest drivers, the UK government recognises the issue and is developing the Civil Liability Bill to redress the important balance of ensuring adequate compensation to victims of injury while clamping down on fraudulent claims. The bill aims to reform the process for submitting whiplash claims, revising how damages are rewarded and making it more difficult to make a fraudulent claim.
It was recently revealed that the bill will be delayed by one year, sparking feelings of disappointment between drivers and insurers alike. However, while short-term frustrations are understandable, the delays are not surprising. Finalising complex reform and changes to the discount rate takes time and the bill needs to go through the House of Commons for further debate.
It is shame that the changes to the discount rate require primary legislation and therefore have to form part of this bill. Changing the discount rate to a more ‘real world’ level represents a material part of the reduction in claims costs, particularly for NHS claims which are ultimately funded by taxpayers.
As for the claimants portal, it is important that when it is finally implemented, it is done so correctly. Most in the industry will remember that when the original portal launched in 2010, there were a number of issues that we would want to avoid repeating, particularly as this time there will be more consumers directly accessing the portal themselves. In the long term, the government’s decision to invest additional time in finalising the bill will benefit all it applies to.
Driving a surge in dashcams
Ahead of the crackdowns, many drivers are taking steps to protect themselves against fraudulent claims. Dashcams (short for dashboard cameras) are becoming increasingly popular with UK drivers keen to capture video footage that could prove what happened or protect them in the event of an accident. In fact, recent figuresshow that 20% of drivers own a dashcam, with more than half expressing an interest in having one. The main reason stated for owning a dashcam was to help establish liability in the event of a crash, demonstrating a clear trend among consumers who want to protect themselves against other drivers.
It is certainly promising to see that consumers are keen to protect themselves and do what they can to establish the facts in the event of a crash. These figures reinforce the need for the bill and suggest that the majority of drivers will welcome the reform.
A fairer future
The Civil Liability Bill will enable the car insurance industry to adopt an uncompromising stance on fraudsters, implementing fixed amounts of compensation and ensuring that only whiplash claims supported by medical evidence will be considered for settlement. We have every confidence that it will result in a fairer future, with cheaper premiums for honest drivers nationwide.