According to sources from the BBC (source), Aviva have a dream – a dream that will save you money. In a triple dip recession (or whatever stage we’re at with it these days!) we’re all in need of a bit of extra cash or being able to save a little extra money in the costs of living. Aviva Insurance claim they can help you out here!
Their proposal according to news sources is to “cut out middlemen who inflate the cost of claims” as they blame whiplash claims for the rapid rise in insurance premiums for cars. The middlemen, they claim, are us – personal injury law firms. What they are proposing is that injury victims go to them directly, allow the insurers then to value your claim, and pay you out without the need for paying legal fees.
But there is one huge flaw in not only their theory, but what they’re saying. I’ll explain a few factors to consider first:
- Insurance is a product that exists to pay damages to people in none fault accidents.
- Insurers, as private companies, are of course profit making firms. Therefore their duty is to their shareholders. To keep them happy, they need to keep costs down and profits up.
- To properly value a claim for personal injury compensation, you need a qualified personal injury lawyer to assess the evidence and maximise the claim.
So the flaw in their grand theory is this: if you claim directly with the insurer, you would have to trust that the insurers, whom bearing in mind are a profit making business whose duty is to cut costs and maximise profits for their shareholders, are offering you the best deal for your claim. In essence, you must place your undying faith in the insurance companies to provide you with the best and fairest offer for your claim.
Now, I can tell you with no doubt or uncertainly in my mind that based on many years of experience in dealing with claims for injury, insurers do nothing but try and stop and limit payouts! Any evidence we send over to them more often than not results in a rubbish low offer from them. We then have to bargain on your behalf to reach the best settlement amount.
The amount of times people have called us up and have been offered sums like £500 to settle their whiplash claim when they’re still suffering is unreal. The average payout for a minor claim is £2,500! And you should never settle a claim whilst you are still suffering because you risk under settling the claim as you do not know how long you are going to be suffering for! Yet insurers repeatedly push people in to settling directly for low amounts and when it is a crazy risk to do so!
There’s a lot more! Read on!
Insurers have been moaning for years now about the legal costs involved for claims, which is why they have repeatedly got their own way and reduced the amounts lawyers can recover for legal fees for clams. We only get around £1,500 in legal fees for a straightforward claim under the Road Traffic Accident Protocol for low value claims rules; so there are already systems in place! Further to this, fees are being reduced even further in April.
They talk about referral fees also being to blame, but as I said above, we get fixed fees – the costs we recover don’t encompass referral fees. The victims in referral fees are the claimants who end up with a rubbish service because their lawyer has wasted £1,000 of their fixed costs on paying an insurer for their case. And that’s the other thing – it’s the insurers who are primarily responsible for receiving referral fees from lawyers! Honestly, how dare they bring up a subject that they are partly to blame for!?
According to the news reports, Dominic Clayden, claims director at Aviva, said “Our primary concerns are that injured parties receive care and compensation as quickly as possible, and that all motorists benefit from a reduction in the excessive costs that have built up in claims over the past few years.”
Given what I’ve explained above about the fact that insurers argue and argue and argue with us until we’re all blue in the face about how little people should be paid for their claims, and given the fact that the amount of times people have called us up and have been offered poor amounts like £500, or £750, or sometimes £1,500 when their claim could be worth up to £5,000 for a minor whiplash, and given the fact that they give negligent advice by telling people to settle before they’ve healed without explaining the consequences; does their statement really hold any element of truth in it?
There have even been occasions where insurers have tried to force people to settle directly for £1,000 – £2,000, and ended up being able to recover £100,000 when claiming with a lawyer! So the insurers can in theory get away with murder if we have to put our faith in them and claim directly without a lawyer!
Hold this in mind – when you get your car repaired, do you just accept an amount from the insurers for the repair work? No, you get the car taken to a garage where they professionally quote what needs to be done. It’s no different for whiplash claims – you need a qualified lawyer who is independent to the insurer to professionally value your claim.
But that’s not all…
Aside from my aggressive stance on this issue, there is another hugely important factor to consider; one which is also highlighted din the BBC report. As our dear friends at APIL (Association of Personal Injury Lawyers) have rightly pointed out, ““Putting the injured person entirely in the hands of the guilty party’s insurer would create a profound conflict of interest. Independent advice is key to preventing such a conflict and ensuring a fair outcome for the injured person.”
The Claimant, i.e. the innocent victim here, is at a massive disadvantage by being placed in the hands of the company responsible for paying them out, who are, as stated above, a profit making firm whose primary responsibility is to their shareholders. Whichever side of the fence you’re on in the long fought battle of whiplash claims, it is clear that such a proposal is nonsensical, unjustifiable, and completely dangerous to the people who deserve compensation for genuine injuries sustained at the hands of a driver who fails to pay the due care and attention owed to them.
As I mentioned earlier, the saga continues as April will see the banning of referral fees (which we wholly support as we have never paid referral fees for claims as we recognise the victims are the Claimants) and further reductions in legal fees for claims. Sadly, this may result in the victims receiving less compensation, and the winners in that scenario will be the insurers. So let’s see if they reduce insurance premiums after April to take that in to account. I very much doubt they will.
I’m sure you’ll agree that such a proposal is completely unethical.
