Are car insurance price rises really due to personal injury compensation claims?
Recent media reports from financial experts are advising that an increase in car insurance premiums may be due to a rise in personal injury claims arising from road accidents.
The increase is being attributed to TV and other advertising but Simpson Millar’s Road Accident Compensation team can confirm that many recent claims have arisen from the adverse weather conditions and also resulting road conditions (see our article – Weather damaged roads cause further danger once the snow goes"
Whilst the financial experts blame the infamous “no win no fee” agreement for the increase in road accident claims, the Courts are very mindful of fraudulent or over-exaggerated claims in recent times and this has resulted in rulings against Claimants, designed to remind those making claims of the power of the courts and the penalties of bringing such a claim.
As many drivers are aware the Motor Insurers' Bureau receives approximately £30.00 per insurance policy to enable them to deal with claims of innocent victims of uninsured or untraced drivers. Whilst some experts claim this pushes up the cost of insurance, the MIB has been established since 1946 and has only ever increased their proceeds from £15.00 to £30.00 over the last 60 years. Most drivers would agree this remains excellent value in view of the very productive job they do.
In May 2010, the Ministry of Justice hopes to implement a streamlining process to road traffic accident claims (see our article "Ministry of Justice approves streamlining process for road traffic accident claims"
) which will simplify procedures and ultimately reduce costs, but no reports have been made of how this will decrease the cost of insurance.
Anyone involved in a non-fault road accident has an entitlement to recover compensation from a negligent party such is the very reason for having insurance. Potential claimants should not be intimidated by the negative reporting of what is perceived as a "compensation culture".
Insurance companies are eager to lay blame at the escalation of cost of insurance premiums at the feet of the general public yet these companies are still making huge profits from insuring drivers. Maybe the extent of their profit should be capped to keep the cost of insurance at a reasonable level. Useful links