THE Association of British Insurers is calling for the claims system to be changed, labelling it ‘dysfunctional’.
It wants a crackdown on people being encouraged to exaggerate their injuries, an end to spam texts urging people to claim and referral fees.
A spokesman said: “The system is basically dysfunctional. There’s no free money, it ends up being paid for in premiums.
“At the moment if insurers stopped accepting referral fees, others would sell a victim’s details, like a repairs garage.
“It’s a vicious and expensive circle that needs to be broken.”
A Government-backed consultation into the claims system ends in the autumn.
The number of claims companies has doubled in the last two years to 3,400.
Last month MP Jack Straw said: “This is not a system. It’s a racket. The quicker it’s ended, the better it will be for the law abiding motorist.”