Motor Insurance Case Study

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University of Malta Bachelor of Commerce INS2020 Motor Insurance Mr Francis Valletta Tackling Fraudulent Whiplash Claims in the United Kingdom Kayleigh Portelli 181394M Table of Contents OBJECTIVE 3 INTRODUCTION 4 WHIPLASH CLAIMS 5 1.1 WHAT IS WHIPLASH? 5 1.2 THE RISING OF WHIPLASH CLAIMS 5 IMPACT ON THE INSURANCE INDUSTRY 6 GOVERNMENT INTERVENTION 7 3.1 NEW REFORMS 7 3.2 BETTER MEDICAL EVIDENCE 7 MEASURES TAKEN TO REDUCE FRAUDULENT CLAIMS 9 4.1 FURTHER ACTION TO CHALLENGE FRAUDULENT CLAIMS 9 4.2 THE SMALL CLAIMS TRACK THRESHOLD 9 ARGUMENTS AGAINST REFORMS 10 CONCLUSION 11 REFERENCES: 12 Objective Understanding the reason behind the rising numbers of fraudulent claims with regards to whiplash in the UK,…show more content…
For this reason, someone who has been in an accident may come complaining of the symptoms mentioned above weeks after being involved in an accident, claiming they have whiplash and therefor seeking compensation for their injury. In the UK, this type of attitude is said to be a “claim culture.” 1.2 The Rising of Whiplash Claims As mentioned earlier, the fact that whiplash is hard to prove made it easier for the insured to claim, whether being genuinely injured or not. This fraud craze has been encouraged by “no win no fee” claims, which gives the insured a boost in the decision of whether to claim or not. The “no win no fee,” means that if a legal claim is lost, the claimant would not have to pay their legal representative. However, if they win, the insured would have to pay a sum from the compensation won to their solicitor. This therefore encourages the insured to claim as they stand to lose nothing due to the fact that they would not have to pay their legal representative. In some cases, however, one would have to pay court fees and other expenses, whether they won the case or lost. Impact on the Insurance…show more content…
This register allows insurers to share their information on known individuals who have committed fraud with each other, allowing insurance companies to know whether a person has committed a fraud before they are able to buy insurance. The Association of British Insurers is also financing the Insurance Fraud Enforcement Department (IFED), which is an expert police base appointed to the City of London Police. IFED is committed to addressing insurance fraud, including motor insurance fraud and organized ‘crash for cash’ gangs, where offenders stage or orchestrate an accident with the aim of claiming on an innocent motorist’s insurance. In 2012, IFED made 260 arrests, secured 12 convictions and issued 76 cautions. The Ministry of Justice has banned Claims Management Companies from offering money to make claims, which tend to be fraudulent. The Government is also working on more awareness with regards to fraudulent claims. The consumers should know that making such claims is wrong and that there shall be consequences for those who commit

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