Insurance Fraud and the Civil Liability Bill
In 2017 Aviva detected £59m of bogus injury claims, totalling £9m more than 2016 and the third consecutive year of rising injury fraud.
Written on 28th September 2018
In 2017 Aviva detected £59m of bogus injury claims, totalling £9m more than 2016 and the third consecutive year of rising injury fraud. Motor insurance fraud accounts for 60% of all fraud Aviva detects and their findings are echoed across the motor insurance industry as the Association of British Insurers figures show the value of fraudulent detected motor insurance claims rose by 4% over 2016 to £775m.
Aviva’s fraud figures show that it is investigating more than personal injury claims for suspected fraud – an increase of more than 1,000 on the year before . Therefore, the UK’s biggest insurer is warning that the rising number and cost of fraudulent and exaggerated whiplash claims could continue to climb until the Civil Liability Bill, which is designed to reduce the cost of motor insurance, becomes law. This month saw the second reading of the Civil Liability Bill in the House of Commons and if there was any doubt of the scale of the insurance fraud these figures demonstrate the time, money, effort and expertise insurers are employing to fight it.
Aviva also reported that “crash for cash,” a staged or deliberate road traffic collision caused solely for the purpose of financial gain, continues to be a significant source of the fraud it detects, with around 1,400 such cases detected so far this year alone. These accidents put motorists and their passengers at risk of real harm and divert emergency services such as police and ambulances from genuine need.
Andrew Morrish, Claims Director, Aviva UK General Insurance, said: “Insurance fraud is a crime, and as our figures show, it is big business. Our customers are telling us they are sick and tired of paying for fraud through inflated premiums. But it doesn’t have to be like this.
“The Civil Liability Bill is a rare opportunity to remove the financial incentives that are at the heart of motor insurance fraud and drive the UK’s compensation culture – including the 900 million nuisance calls and texts made annually which try to encourage people to claim for an injury, often regardless of whether they’ve even been in an accident. The easy cash has everyone from fraudsters and opportunists to some injury lawyers and claims management companies plotting to find a way to get a piece of the pie – which is all paid for by honest customers.
“By enacting simple measures adopted in many other Western countries like France, Spain and Italy, such as having clear compensation awards based on the severity and duration of an injury, the bill can remove the financial incentives that lure fraudsters and reduce the cost of minor whiplash claims. Let’s not forget that motor insurance frauds like crash for cash put honest motorists in harm’s way, as well as pushing the cost of insurance up.”
At Franklands we share our client's frustration when they have been the apparent victim of a crash for cash scam, or when a minor claim escalates into a larger ordeal with potentially significant costs. However, whilst trying to reduce the number and expense of fraudulent claims it is equally important that the Civil Liability Bill balances the need for genuine claimants to have access to payments for necessary medical treatment for minor injuries and any loss of earnings. We welcome this legislation which offers an opportunity to reduce compensation awards and remove the incentive for fraudsters to commit these dangerous acts making roads safer and motor insurance cheaper.