In a bid to reduce the costs associated with car insurance as well as crack down on false whiplash compensation claims, David Cameron has held a summit with several insurance companies to discuss how they can change the way the motor insurance industry handles certain claims.
As it stands, the average car insurance bill costs £410, a 17% increase on last year's cost and not reflective of the average insurance cost for a young driver. Currently, a young female driver can expect to pay around £1,682 in premiums, a figure which rises to £2,977 for young male motorists.¹
According to insurers, the reason for the hike in cost of premiums is down to the number of car accident claims made each year and, in particular, the amount of whiplash claims, which is believed to be over 1,500 every day². Dubbing Britain the 'whiplash capital of Europe', Cameron has pledged to overhaul the industry.
Speaking at the summit, the prime minister said: 'I am determined to tackle this damaging compensation culture which has been pushing up premiums. I want to stop trivial claims, free up businesses from the stranglehold of health and safety red tape and look at ways we can bring costs down.' However, the blame for increasing insurance policies does not lie solely with those who make whiplash claims. The Transport Select Committee has also reported on referral fees and accused the insurance industry of encouraging claims through the payment and acceptance of referral fees in which, insurers sell information about customers who have been involved in accidents to solicitors who then encourage them to make claims. There is also the cost of the accident repairs and hire cars which insurance companies help to spiral out of control.
By looking at the matter as a whole, those making a claim for whiplash as a result of an accident that is not their fault cannot be held solely responsible for the rising cost of insurance. Even the Transport Select Committee have concluded that there are numerous factors affecting the cost of motor insurance and tackling some in isolation would not be guaranteed to bring premiums down. The select committee itself commented that 'Where someone can demonstrate that they have suffered an injury, including whiplash, as a result of a road traffic accident for which they were not fully liable they should be able to claim and receive compensation'.
Cameron's pledge comes just days after the announcement that the Ministry of Justice has published its intention to extend the upper limit of the simplified claims process for road traffic accident claims from £10,000 to £25,000 and expand the process to deal with Employers and Public liability cases, which will also include a full review and extension of fixed costs.
The process allows for quicker exchange of information between the parties where liability is admitted. According to the Association of British Insurers (ABI), this change will allow for faster damage settlements for the 55,000 people injured on UK roads in 2011.³ The announcement follows on from its consultation in 2010 about the reform of civil justice in England and Wales – Solving Disputes in the County Courts: creating a simpler quicker and more proportionate system.
With these continued improvements to the industry, First Personal Injury, one of the UK's leading firms in accident claims, welcomes these changes, whereby the number of bogus claims made is reduced, and consumers are able to cut their motoring costs. As one of the country's most reputable personal injury law firms, First Personal Injury strive to provide the highest level of legal advice and deliver justice where it's due. According to The Citizen's Advice Bureau, we have a 'civil and legal right' to make personal injury claims, yet 69% of us don't4. If you are unsure whether you are entitled to compensation or would like to find out how the changes to the insurance industry may affect your claim, get in touch with First Personal Injury today.
¹Money Expert, Cameron's pledge to reduce car insurance costs, http://www.moneyexpert.com/financial-news/none/800580733/cameronspledgetoreducecarinsurancecosts/article.aspx (2012)
²Money Expert, Cameron's pledge to reduce car insurance costs, http://www.moneyexpert.com/financial-news/none/800580733/cameronspledgetoreducecarinsurancecosts/article.aspx (2012)
³Association of British Insurers, Faster compensation for thousands more people injured in road crashes and in the workplace, http://www.abi.org.uk/Media/Releases/2012/02/Faster_compensation_for_thousands_more_people_injured_in_road_crashes_and_in_the_workplace.aspx (2012)
4First Personal Injury, Home, http://www.firstpersonalinjury.co.uk/ (2012)