Increased Motor Insurance Premiums.

TheRedAdmiral

On another forum I was discussing another topic and the subject of increased Insurance Premiums cropped up.

There has been a lot in the papers about it and most of it, in fairness, is inaccurate.

Below is an example as to how increased premiums occur. I accept that there are a small number of fraudulent claims. However, I would say the scenario below is the major factor - and, of course, insurers will not want their policyholders to know that their premiums are being increased because of their slowness.

Hyperthetical situation.
A 10 month Diagnosed Whiplash is worth £2000 and according to Predictive Fees this would be worth £1200 to a solicitor - Pre Issue (Format=£800 +20%)

So a Solicitor sends the Medical Report to the Insurer and requests a reasonable settlement - which must be made within the required 21 days.

In most instances insurers will make a totally pathetic offer and solicitors are duty bound (acting in clients best interests) to reject the offer.

In many instances insurers (despite their millions) do not have the staff to respond within 21 days and therefore the insurers issue proceedings.

I had a case similar to the above where 2 weeks after issue the insurer settled the claim for £2000. Only now I was entitled to standard costs (based on an hourly rate) as opposed to a fixed fee. The costs were £4300.

Purely, as a result of an insurer not responding on time (and it was a big insurer), it cost an extra £3100 worth of costs.

Who pays for that - Policyholders Of Course!

Dont be fooled by all the arguments in the newspapers. Ive worked on both sides

huckster

Yep, this does increase the losses.

Not sure what the alternative is however. Outsourcing more claims handling, taking more claims handlers on. More medical research and specialised handling of most common PI's. Independent whiplash clinics around the country to look at claims.

Will the government be implementing any measures to reduce level of PI claims ?

When I dealt with Motor claims many years ago, most accident claims did not involve any PI element. People had accidents, but were not injured. If cars say 20 years ago, were less good at protecting passengers from injury, then why should there be more PI's, when more modern cars are better in handling impacts ?

The answer is that many claims are fraudulent or at a minimum any slight pain is totally exaggerated. People probably wake up from sleep with more painful injuries (bad body positioning) than they would suffer in a car accident, but they will try to claim for the accident, because it is an opportunity to make money.

All Insurers should get together and decide on a better process to weed out the unneccessary claims. Perhaps joint investment in 'independent' PI assessment centres.

warwick_hunt_2

Here's another view on spurious injury claims.

Maybe if insurers didn't penalise people for non-fault claims in the way that they do now. People wouldn't feel the need to claim more than they should to make up for their increased premiums (regardless of fault) over the next 5 years.

The whole thing is a vicious circle.

Rolandtheroadie

huckster wrote: »

All Insurers should get together and decide on a better process to weed out the unneccessary claims. Perhaps joint investment in 'independent' PI assessment centres.

This sounds good, I'd always thought a few highly publicised court cases where the insurer doesnt roll over and fights it all the way.
If people knew there was a chance to be taken to court over it, some of the false claimants may think twice.

Perhap a wee conviction or 2 along the way.

mikey72

huckster wrote: »

.............When I dealt with Motor claims many years ago, most accident claims did not involve any PI element. People had accidents, but were not injured. If cars say 20 years ago, were less good at protecting passengers from injury, then why should there be more PI's, when more modern cars are better in handling impacts ?..........

More enlightened, better educated society. Years ago, you could hurt people in a car accident and get away with it.

dacouch

huckster wrote: »

Yep, this does increase the losses.

Not sure what the alternative is however. Outsourcing more claims handling, taking more claims handlers on. More medical research and specialised handling of most common PI's. Independent whiplash clinics around the country to look at claims.

Will the government be implementing any measures to reduce level of PI claims ?

When I dealt with Motor claims many years ago, most accident claims did not involve any PI element. People had accidents, but were not injured. If cars say 20 years ago, were less good at protecting passengers from injury, then why should there be more PI's, when more modern cars are better in handling impacts ?

The answer is that many claims are fraudulent or at a minimum any slight pain is totally exaggerated. People probably wake up from sleep with more painful injuries (bad body positioning) than they would suffer in a car accident, but they will try to claim for the accident, because it is an opportunity to make money.

All Insurers should get together and decide on a better process to weed out the unneccessary claims. Perhaps joint investment in 'independent' PI assessment centres.

The government changed the law circa 2000 to restrict access to Legal Aid for Personal Injuries in return they made it easier for CFA (No win no fee) to make up for it. This coincided with more tv channels and thus cheaper daytime advertising.

I remember the days before CFA, an injury claim was very rare and normally carried out through BTE Legal Cover.

They've recently said we make more injury claims than the U.S.A which is some going.

The situation will only get worse as more and more people realise how easy it is.

We need urgent reviews of the situation and possibly change of laws as the current laws do not allow the Insurers to properly (At a reasonable cost) defend spurious PI claims.

Genuine injury claims should be paid but the dodgy ones should be stopped.

Try mentioning to a handful of friends that you're had an accident and see how many of them will tell you to make a claim even if you have no injuries.

Eventually something will be done to change the law on this, why not take the bull by the horns and do start doing something about it now