ABI urges extension of injury damages tariff beyond whiplash

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Non-whiplash injuries: Insurers argue it is a growing trend

The fixed tariff for whiplash claims should be extended to other injuries to help reduce motor insurance premiums, the Association of British Insurers (ABI) argued yesterday.

It also called for the personal injury discount rate to be revised as part of a 10-step plan to combat the rising costs of motor cover.

The ABI’s Roadmap to tackle insurance costs said that “many claimants are now encouraged to claim for additional injuries that the claimant legal sector argue should attract significantly higher damages amounts than the tariffs that have been set for whiplash”.

This meant the “reform principles enacted for whiplash should be applied to similar injuries to keep costs under control”.

Increasing the £5,000 limit for claims that go through the Official Injury Claim portal to account for inflation “would also help control the total cost of settling such claims”, the ABI went on.

“We continue to work with government, regulators and the courts to reflect these views on behalf of the customers who are paying premiums.”

Insurers have to report to the Financial Conduct Authority (FCA) by the end of May on the savings they have made as a result of the whiplash reforms in 2021 and how they have affected premiums.

On X, the Association of Personal Injury Lawyers (APIL) noted: “Since the ‘whiplash’ reforms were introduced in 2021, the cost of injury claims settled by motor insurers is down by 27% according to latest ABI data.

“During the same period, the price of motor insurance has increased by 90%, according to the Office for National Statistics.”

Also, the Association of Consumer Support Organisations said earlier this month that data it collated from three medical reporting organisations countered the claim of defendants that the OIC has turned consumers in England and Wales into “a nation of weak ankles, knees and toes”.

Andrew Wild, head of legal practice at Huddersfield law firm First4InjuryClaims, commented: “Insurers’ claims of a surge in ‘wristlash’ and ‘hiplash’ are not borne out by the figures, which show that the number of motor claims are at an all-time low.

“Today’s announcement represents a further shifting of the goalposts by the ABI as they continue to attempt to bring other bodily injuries under the whiplash reform umbrella. It is also incredibly premature.

“The Supreme Court judgment into mixed injury claims is awaited, as is the statutory review of the whiplash tariff, and the FCA’s report on whether motorists have actually seen any savings as a result of the changes to date.

“If the ABI is, as it claims, all about helping consumers make informed decisions then it should follow its own advice and wait until all the facts are known before pushing for further reform.”

The roadmap complained that the current negative discount rates across the UK made paying compensation “much more expensive”.

“We think the rates in the UK should be re-evaluated to better reflect the real returns accumulated by low-risk investors of lump sums and have been working to feed into calls for evidence which will inform a decision this year.”

APIL chief executive Mike Benner responded: “The insurance industry persists in demonising victims of negligence to cover for their own business practices. Whiplash victims were already hit hard when compensation was slashed three years ago on the promise of lower premiums, which never happened.

“Now insurers are shamelessly turning their attention to the most severely injured road crash victims with life-changing injuries, who must not be burdened by the industry’s wider problems.”

Other measures in the plan included making more data available for consumers to understand which vehicles were more expensive to insure, graduated drivers licensing to improve road safety, more support for the repair sector, and cutting insurance premium tax.

The ABI cited EY figures in saying that claims cost inflation meant that, for every £1 paid in premiums, insurers incurred £1.14 in claims and expenses last year.