Insurers And Lawyers Both Urged To Stop Practices Which Force Premiums Up

Members of Parliament in the UK have called on the motor insurance to put an end to the sharp practice which they see as driving up car insurance premiums to such an extent that people can no longer to insure their cars risking an increasing trend of uninsured drivers on the roads.

A transport Committee made up of MPs from either side of the house warned that the cost of some car insurance premiums shooting up by more than 40% last year was creating a market dysfunction. The blame was placed with uncontested whiplash claims.

Keep It Out Of Court Costs Us All More

Because insurers are not contesting the increasing numbers of whiplash claims that they are presented with they are losing increasing amounts of money, money which is then recouped from the premium paying driver. The numbers of claims are rising as cars get safer, meaning that more people are surviving accidents that might otherwise have proved fatal. So that’s good news, the bad news is that because so many people are registering claims insurance companies are swamped and are settling the claims without contesting them in court. This might prove to cost more for each case the insurance company lost but savings would be made, in theory, when they won the case.

However, when insurers do go to court to contest the claims by people claiming to be suffering from whiplash, an injury which while being extremely painful doesn’t often manifest distinctive, obvious wounds, only a minute proportion were found to be falsifying their injuries. The committee have suggested introducing a higher threshold at which compensation would be paid for whiplash injuries making it more worthwhile for insurers to contest claims and also looking at the way no-win-no-fee solicitors advertise and attract clients in the press and on the internet.

Victims As A Commodity

The committee also urged government to require insurance companies to adhere more fully to the 2008 Data Protection Act which ensures that information that is kept on individuals is kept safe and accurate. Currently insurers are buying and selling data on people who’ve recently been in accidents to one another as well as cold calling companies who then contact victims to sell them on the idea of making a personal injury claim.

Louise Ellman, who chaired the committee’s meetings stated that: “The insurance industry should stop its sharp practices which push up premiums, such as passing drivers’ data on to other parties or takig referral fees from lawyers, garages and car hire companies.”

@DanCash is a features writer living in the UK. No win no fee solicitors offer a valuable resource to people who wouldn’t otherwise be able to afford the expense of bringing compensation claims.