Widespread telematics use could bust crash for cash schemers and fraudulent whiplash claimants, lowering everyone’s insurance premiums. Black box technology, often installed in cars as part of telematics insurance policies that can trim costs, can track speed and maneuvering, pointing to possible culpability in an accident. They are frequently equipped to send out emergency calls in the event of an accident and to produce comprehensive crash reports for use by insurance companies and law enforcement.
Some telematics devices are so sophisticated they can predict driver and passenger injuries and the amount of damage sustained by the vehicle, possibly throwing many bogus or exaggerated injury claims into question.
“If a car is fitted with telematics technology and has an impact with another vehicle we can predict, with a high level of accuracy, the damage to either vehicle and the likely injuries sustained by any driver or passenger,” Jonathan Hewett of Octo Telematics explained. “This means the end of bogus whiplash claims and crash for cash schemes as we know it.”
In the notoriously fraudulent Italy, telematics devices have such advanced accelerometers, tracking vehicles’ movements, that insurance companies have been able to reject fraudulent or exaggerated whiplash claims on the basis of their reports, Andrew Smith, Managing Director of Cobra UK, told MotortradesInsight.
“If there is a crash, immediately, with no human intervention, it’s all automatic and produces a crash reconstruction report from the data from the accelerometer,” he said. “It produces a three-page electronic report within six seconds of the event which shows a full breakdown of what happened and how. What happened X number of seconds before the crash? What happened X number of seconds after the crash? It will plot the incident on a map so you can see exactly where it is. It’s pretty irrefutable that it’s literally taking information from the vehicle itself and then transmitted it before anyone has any chance of tampering with it.”
Cobra currently produces telematics systems with similar accelerometers and crash reporting and tracking devices for Bentley, Ferrari, Maserati, and Porsche. “If that technology gets adopted [in the UK] I’m almost certain it will help reduce policy costs because a big issue for insurance companies is ‘cash for crash,’” he added.
Whiplash claims, many of which aren’t backed by medical evidence, account for a huge portion of issuance company payouts. 430,000 people in the United Kingdom made a claim for whiplash in 2007, resulting in payouts that ran up to £2 billion. Those expenditures accounted for 14% of drivers’ insurance premiums and are are estimated to add £90 that cost of the average motor policy. Although the number of car accidents fell 23% between 2007 and 2012, whiplash claims surged by 70% and currently account for 75% of all personal injury claims. By comparison, in France they amount to only 3%.
Last year the government introduced new stricter regulations of whiplash evaluation, requiring claimants to be evaluated by independent doctors rather than their personal GP, and cracked down on referral fees. Claim management companies had been paying insurance companies and accident repair facilities fees for access to the names of people involved in accidents and then encouraging them to make claims so they could siphon off up to a quarter of any compensation. Similarly, solicitors specialising in whiplash cases often offered their services a no-win, no-fee basis, encouraging policy holders to make false or trumped up claims with little risk to their wallets. No-win, no-fee arrangements were reformed and are now under stricter supervision to defray the groundless claims that are inflating insurance premiums. However, the best way to deter or expose motor fraud may be through increased or even mandatory black box installations in cars on UK roads.