LONDON (Reuters) - British road accident insurance rules should be overhauled to root out fraudsters making fake claims for whiplash which drive up premiums, MPs said on Wednesday.
False and exaggerated motor insurance claims could represent more than 60 percent of all claims for whiplash, the Transport Select Committee of MPs said in a report.
The report suggests reducing the limitation period for claims and requiring whiplash claimants to provide proof they had either been seen by a doctor or attended a hospital emergency department shortly after the accident.
Steve Maddock, managing director of claims at insurance company Direct Line Group, supported the proposals. "This will help reduce fraud and speed up the process for those genuinely injured," he said.
Insurers should also end practices which encourage fraud and exaggeration, such as making offers to personal injury claimants before a medical report has been received, the committee said.
Forms of fraudulent activity highlighted in the report included "cash for crash", where crashes were caused deliberately to generate claims, as well as claims relating to non-existent passengers, fabricated or exaggerated symptoms, and exaggeration of the impact of a genuine injury.
Government proposals to hear whiplash claims for between one thousand pounds and five thousand pounds in a small claims court were criticised by the select committee.
It said this would be counter-productive in discouraging fraudulent and exaggerated claims because expert evidence was not generally submitted in a small claims court.
The plan could also impair access to justice, particularly for people who do not feel confident to represent themselves against insurers' legal professionals, the committee said.
Reporting By Sebastian Salek; Editing by Pravin Char