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Motor Insurance Fraud

Volume 570: debated on Tuesday 12 November 2013

8. What steps he has taken to reduce motor insurance fraud to help motorists with the costs of driving. (901035)

On 23 October the Government announced a package of reforms to ensure the availability of good-quality medical evidence in whiplash cases. Our reforms will create a robust system that deters speculative and fraudulent claims. They will lead to reduced costs for insurers and lower premiums for honest motorists.

I thank the Minister for that reply. How will he ensure that the medical panels are independent and will help to stop bogus claims?

I can assure my hon. Friend that our reforms will see experts commissioned jointly by both the claimant and the defendant and paid regardless of the outcome of the claim. The measures will help ensure independence, and the new examination and reporting scheme will result in fewer speculative and fraudulent claims.

A constituent of mine was involved in an accident in which the car in front of her made an emergency stop. She swerved to avoid it and the two vehicles made contact without significant impact, yet her insurers agreed to pay out a £4,000 claim for whiplash, which could not possibly have resulted from the accident, without informing her, let alone consulting her. Will my hon. Friend look into the case to see whether there are wider lessons to be learnt?

My hon. Friend will appreciate that I am unable to comment on individual cases and am not aware of any plans by the insurance industry to make information of that sort available. However, I can say that I very much hope that the reforms we are putting in place will ensure that fraudulent and speculative claims of the sort she refers to are weeded out in the first instance.

Has the Minister made any assessment of the different levels of fraudulent claims in the regions of the United Kingdom? Has he discussed the issue with the Northern Ireland Executive, particularly given that many of the insurance firms are based in the rest of the United Kingdom, rather than Northern Ireland, where it is a major issue?

I am aware of certain figures showing that some areas have a higher propensity for claims than others. We are in the process of consulting a broad spectrum of stakeholders. If there are any we have missed, I am more than happy for the right hon. Gentleman to contact me so that we can include them.

Did the Minister read the e-mail sent to us both yesterday by the victim of a whiplash sting? His insurer, without consulting him or any medical evidence, paid out £2,700, £1,600 of which went to a claims management company, and then more than doubled his premium. Rather than blaming genuine victims for the cost of motor insurance, why has the Minister not tackled the claims management companies and insurers whose actions encourage fraud? Is it because of the millions they give the Tory party every year?

The hon. Gentleman is clearly out of date. If he did his research properly, he would be aware that since January this year 800 CMCs have closed. This is an issue where we are trying to do good and where all stakeholders are working together for the greater good of the public. It is regrettable that he is resorting to type and cannot recognise that he should be working to do good rather than being his usual destructive self.