The backlash against whiplash has truly begun as four are jalied for insurance fraud
LV=’s bold decision to pursue the culprit behind a fraudulent whiplash claim and push for a tough sentence that included jail time marks the start of a long overdue backlash. Insurers are in the frame for the rising cost of motor insurance in the eyes of the public, the media and the government. So they have no choice but to take action to bring down costs, however uncomfortable those actions might initially feel.
Neither LV= nor the insurers that backed them this week particularly want to see policyholders in prison, but the message that insurance fraud is somehow okay has got to be stopped. One claims director once joked that the public’s mind on fraud would only be changed when a photogenic grandmother or similar was banged up for exaggerating her insurance claim - and then featured on the front page of The Sun. Light-hearted this may be, but it makes a serious point. The public currently believes not only that insurance fraud is okay, but that it has no consequences. So is it any wonder that they prove fertile ground for claims farmers?
Turning a blind eye to fraud - or even blacklisting attempted fraudsters - is no longer an adequate response. In the face of aggressive, systemic claims farming, only clear and serious consequences will stop potential fraudsters. If the industry has to take some negative headlines on the chin, then so be it. That will be a painful but necessary part of the public re-education.
Insurers have long acknowledged the need for a concerted public education campaign on fraud - now is the time to act. But the industry can’t change the culture on its own. If insurers are to prosecute fraud cases more energetically, they need the support of the judiciary in doing so - particularly with regard to whiplash, where verdicts and sentences vary wildly from one part of the country to another.
At the recent summit, David Cameron pledged the government to look at tightening up the rules for medical evidence around whiplash. Living up to this pledge is vital.