Thursday 27 October 2016 6:00 am

Whiplash-gate: we’re all paying for the unscrupulous few, say motoring experts

Oliver Gill is a City A.M. reporter, you can contact him on

Oliver Gill is a City A.M. reporter, you can contact him on

Car insurance premiums are spiralling out of control due to a "whiplash epidemic" according to data released by motoring organisation the AA.

The average cost of annual car cover is now £82 higher than a year ago, a 17 per cent year-on-year increase. Alongside spurious whiplash claims, the AA said that recent increases in insurance premium tax (IPT) have also put revved-up prices.

“I can’t see an immediate end to the current upward trend,” said Michael Lloyd, the AA's director of insurance.

Read more: Here's how the weak pound is fuelling increased tax revenues

The AA's analysis of Association of British Insurer's data indicated that of 839,000 small injury claims – where pay-outs were less than £25,000 – 750,000 related to whiplash. Lloyd said:

The whiplash epidemic has dogged the British motor insurance industry for a decade and continues to do so.

Drivers are still being pressured into making claims for often minor collisions they might have forgotten about. This is pushing up claims costs, because insurers can’t prove that an injury wasn’t suffered.

Earlier this month reports in the media suggested that the government was putting on ice plans to crack down on whiplash reform. 

Read more: Five ways government can cut the soaring cost of car insurance

Despite a comparative soft general insurance market, motor insurers were furious that they were being forced to pass on price increases to consumers as a result of sky-rocketing whiplash claims and IHT hikes.

Andrew Parker, the head of litagation at DAC Beachcroft explained that the number of whiplash claims in the UK makes up around half of all such claims across the EU. He added:

These hundreds of thousands of minor injury claims each year are hugely inflating the cost of motor insurance in the UK. An urgent fix is needed for the good of consumers: we are all paying to feed this 'whiplash monster'.