Insurers come under fire for soaring premiums

Weekly whiplash news review: 7 days ended 3 Oct 2012:

With whiplash and other injury claims already raising costs, the insurance industry has come under fire for increasing premium prices even further.

Premium prices for motorists have already gone up by 12 per cent from 2009 to 2010. Meanwhile, the first three quarters of 2011 saw an additional 9 per cent increase – and while insurance companies point the finger at fraudulent personal injury claims, the Office of Fair Trading tells a different story.

The watchdog agency has put its foot down with insurers, sending them to the Competition Commission for a detailed investigation regarding why insurance costs are increasing by around £225 million a year as a result of high priced garage fees for vehicle repair and car hire fees for replacement vehicles whilst repairs are being undertaken. It’s not exactly aimed towards tackling the so-called ‘compensation culture’ ostensibly gripping the UK, but it’s a step in the right direction if it will result in slashed insurance costs for harried motorists.

Menwhile, fraudulent car accident claims have been a constant thorn in the side of the insurance industry and the average motorist. There were around 45,000 cases of car accident claim fraud uncovered in 2011, according to the Association of British Insurers, which cost the industry £541 million and equated to more than 850 false or spurious injury claims on a weekly basis – many of which are whiplash claims.

However, many of these dishonest motorists will now find themselves branded for their actions, thanks to the existence of the Insurance Fraud Register, an invaluable tool to be used against scammers and fraudsters hell-bent on raising the cost of insurance for the rest of the motoring public.

The amount of cash being paid out in personal injury compensation awards to customers of insurance companies is growing rapidly, with the ABI discovering that UK insurers are shelling out nearly £200 million every day in damages across all insurance sectors. The share paid out exclusively to motorists was found to be £19 million.

 

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