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Tuesday, 2 October 2012

Motor Claims - who's making and who's paying?

One of my regular themes this year has been the complaints by and on behalf of the motor insurance industry that there are too many accidents and that this is putting up the cost of our insurance premiums. They regularly blame victims for pursuing claims against offending drivers saying that it is their fault. They would have us believe that if we could be stopped from claiming damages then our insurance would go down.

This ignores the conduct of insurers themselves and the role they have played in inflating the cost of claims. The industry has now been referred to the Competition Commission by the OFT. This is due to their practice of controlling repair and hire charges, thus increasing the cost. It is estimated that this could be adding up to £225m a year to the cost of insurance -

According to the BBC, car hire was on average £560 more expensive each time than it needed to be. Each repair was on average £155 more expensive.

Many insurers receive referral fees from hirers and repairers.

It is fair to say that tough action is needed in relation to motors claims. But the media loves to criticise the victims for seeking damages when they are least to blame. There are plans to restrict the right to pursue claims because of a mythical compensation culture. It is really the insurance companies themselves who are making huge profits on the back of claims and then charging high premiums into the bargain.

I would challenge them to guarantee a rebate on premiums if the proposed cuts reduce the number of claims.

I would also support a ban on the sending of text messages and emails to encourage claims. I get about one text a week telling me to bring a claim. Some even me tell how much I will get for an injury that never happened!


  1. Totally agree that there should be some form of guarantee in respect of a reduction in premiums in the event that the 'reforms'bring about a reduction in the number & cost of claims being brought each year. After all the Insurers incessant lobbying of the government over a number of years has been on the basis that this will happen. Waits with bated breath...

    1. I suspect that we may see a modest reduction in the run in to the 2015 election...

  2. My Wife became involved in a motor claim when the wing mirror of her car touched the wing mirror of a stationary vehicle. The driver and three 'passengers ' made claims for whiplash injuries supported by dodgy Medical Reports .Her Insurers took a robust view and defended the claim and the claimants withdrew their claims,with an appropriate costs penalty, the day before the trial,when they realised my Wife was not going to give them a chance to earn easy bucks.
    After receiving a letter from her own Insurers,thanking her for a taking a stance against the fraudulent claimants,she thought that was the last of the matter, onLy to receive several telephonee calls from a claims company inviting her to instruct them to pusue a claim ,as they understood she had been involved in a motor claim.
    She eveNtually made enquiries of the company and they admitted that her details had been passed and sold on to them by one of the Insurance Companies involved in the litigation,in circumstances when they both knew that she had not been injured and her vehicle had not been damaged!This only shows what utter hypocrites these Insurers are!
    The general public should be made more aware of such practices and perhaps we could then have SOME 'Insurer Bashing' rather than Lawyer Bashing!

    1. Thanks for that comment and for sharing a real story that shows the impact of all this..

  3. I agree, it is a mystery to me why Lawyers are such popular and easy targets for criticism when most people are lucky enough to avoid us by and large, whereas insurance companies - whom we all unfortunately have no choice but to deal with - run rackets on a major scale which hit us all in the pocket.
    Good article Steve, was just thinking of getting round to one myself on the same subject!

  4. Thank you Julie - go ahead and do yours! The more noise we make the better...

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