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Thursday, 7 March 2013

Motor Insurers - the real world and the fantasy world

Those lawyers who act for the victims of motor accidents are bracing themselves for some of the most far reaching changes that we have ever seen. I don’t propose to repeat the details of the cuts which I mentioned last week.

Now one of the points made by insurers is that the number of claims and the amount of costs paid out is the reason why insurance premiums are so high. We have been told that we will see a reduction in motor premiums as a result of the cuts. Indeed the government, who have given the insurers everything they have asked for, have virtually made that a promise –

Of course, no-one I know, is holding their breath. The first signs of what to expect have come at the ABI Motor Claims Conference this week. According to the website litigation futures there was a heated discussion during which the Chair of The Motor Accident Solicitors Society (MASS) asked when we were likely to see the much vaunted reductions. John O’Roarke of LV= insurance company simply said that premiums have already come down and we might see about 3% but - “I’m not hopeful of much more”.

So this is the way it is going to be. We are seeing huge cuts in the rights of victims to bring claims but when it comes to premium reductions we may have a long wait.

This again shows that the insurance industry and their friends in government have no real interest in making driving cheaper for us all. That is just an effective way of selling their plans, especially to the populist press. To add insult to injury we have learned that motor insurers Admiral made £6 per car it insures from referral fees –

Mr. O’Roarke also showed a remarkable lack of understanding of the concerns of lawyers who are genuinely worried that the cuts will put them out of business and lead to redundancies. He talked about stopping claimant lawyers from buying - “another house in Barbados”. It is difficult to imagine a statement more insensitive and more removed from the real world. I have been overwhelmed in the last week with calls and emails from concerned solicitors who do not know what the future holds. This is the real world and it is a long long way from holiday homes in the sun.

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