Govt. to review insurance claims

Prime Minister considers adopting German insurance system

Published:  20 February, 2012

THE Prime Minister has pledged to 'free up businesses from the stranglehold of health and safety red tape' in order to look at ways of bringing insurance premiums down.

The cost of insuring domestic and commercial vehicles has skyrocketed by more than 70% in the past six years, while the total number of accidents and serious injuries has actually decreased by a quarter in the same period. However, the number of claims for whiplash injury has increased to some 1500 claims per day - amounting to well over half a million claims per year.

The government proposes to copy the German model whereby a claim for neck injury can only be lodged if the accident occurred above a certain speed.  Parliamentarians have already pledged to ban 'referral fees' where an insurance company sells the details of injured parties to claims management companies who pester the contacts into making spurious claims. This practice was decried by former Home Secretary Jack Straw as a 'racket' in January this year.

Nick Starling, the director general at the Association of  British Insurers said: "If an insurance company wishes to challenge a whiplash claim they effectively have to say someone is lying to them and we think this needs to be reformed."

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