Low Speed Impact
Low Speed Impact claims: The role of technology in settling disputes
Low Velocity Impacts (LVI) and associated whiplash claims have a mixed reputation in the insurance industry . LVI claims have long been a problem for insurers, who have had to constantly adjust and re-strategize how best to deal with these type of cases; factoring in changes in legislation and new industry standards. Historically, LVI claims have been disproportionally costly and time consuming to investigate and handle through to a conclusion. However, as technology continues to form an increasingly integral part of the claims and evidential gathering process, LVI claims will hopefully become less burdensome for the insurer.
A stereotypical LVI will usually involve a collision between two slow-moving vehicles (car park collisions), or between a slow-moving vehicle and a stationary object/vehicle, where the speed and forces generated on impact are thought to have been insufficient enough to trigger the whiplash mechanism, thus rendering injury to one’s person improbable or unlikely.
For an insurer, whiplash claims resulting from a LVI scenario can really affect their bottom line. This is due to the often long and protracted cost of an investigation, combined with the possibility of defending a claim through to litigation. Such claims rely strongly on medical, engineering evidence, witness testimonies, subjective personal opinion, and camera footage where available; all of which can be fallible, inconsistent, and up for dispute.
The rise of “crash for cash” scams in the last decade has seen insurers continue to pay out millions in unwarranted compensation, which increases premiums for honest drivers who suffer the financial consequences of fraudulent claims. In 2017 the Association of British Insurers reported that the value of detected fraudulent motor insurance claims stood at £775 million, and personal injury claims are responsible for a significant proportion of this figure.
When assessing LVI claims, insurers face a difficult challenge to ascertain what level of compensation to offer when a personal injury claim is intimated, if indeed any offer should be made at all. A report of whiplash in these instances can be highly subjective; much reliance or acceptance, at least initially, is placed on the claimant being a credible, reliable historian. However, where there is the potential for compensation to be paid out on a claim, a claimant’s credibility cannot always be taken at face value. It falls to the insurer to scrutinise this credibility, in accordance with pre-defined case law, once causation is raised an issue, and this where technology can provide real benefits.
Technology is playing an increasingly important role in helping insurers to detect fraudulent claims and provide indisputable, evidential proof of an accident as it occurred. Integrated vehicular technology such as cameras, automated braking, and black box telematics have enabled insurers to gather an unprecedented level of information on a reported incident; information which can then be used to validate and invalidate claims as they materialise.
Data from black boxes in particular can be an invaluable tool for an insurer. This is because the box captures and provides objective, unbiased, and extremely accurate information following an incident, such as accelerometer, g-force, speed and positional data. Where the human mind fails to remember, the machine can retain a virtually unlimited amount of information, and this is where the technology can really bring financial benefits to the insurer if used to their advantage.
Insure Telematics Solutions recently assisted an insurer client on a LVI case, where a personal injury claim was made. The insurer concerned received initial notification of the incident via their policyholder, who reported having collided into the rear of a third-party motorist at low speed. The policyholder also reported that minimal damage had been sustained to their respective vehicles. Based on the report, the insurer was sceptical as to the legitimacy of the personal injury claim later filed by the third party driver.
The insurer subsequently liaised with ITS, following which they compiled a detailed telematics claims report based on the black box data collected at time of the incident. The telematics data verified that the insured vehicle was travelling at less than 5 mph at the point of the impact, with a low recorded g-force, essentially supporting the policyholder’s protestations. The insurer relied on the data within the ITS telematics claims report, and combined with other supporting evidence, the insurer subsequently repudiated the claimant’s injury claim, saving approximately £6,000 against their loss ratio in the process.
Had the policyholder not had a telematics device fitted, evidence otherwise used to dispute the validity of the claimant’s injury claim would have been limited, and the insurer may have been faced with the choice between a hefty pay out, or, a protracted and costly dispute that may ultimately have led to Court proceedings being issued. For cases that do go to court, evidence from black boxes is now widely accepted, giving rise to a phenomenon known as “digital witnessing”; whereby the subjective, human element of testimony is replaced with an accurate, data led report of events.
The motor insurance industry has long been hindered by the “he said, she said” nature of personal injury claims, but as technology continues to add transparency, accuracy, and irrefutable evidence to the mix, we are moving rapidly to a future based more on fact, and less on fiction.
By Adam Gooch, Commercial Director at ITS