MP's believe car insurance firms are encouraging claims

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MP’s have recently criticised Insurance companies for allegedly encouraging injury claims after car accidents.

The Transport Select Committee recently reported how Insurance Companies are paid "referral" fees for giving law firms the names of people involved in crashes. Some insurers are charging up to £1000 per claim.

These people may then be persuaded to sue for compensation.

The Association of British Insurers said the rise in legal costs had added £40 a year to average motor premiums.

The Transport Select Committee felt that the insurers must do more to tackle fraudulent injury claims, which were also driving up the cost of motor insurance.

MP's believe a dedicated police unit, paid for by insurers, to tackle the issue should be set up.

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