MPs blame injury claims for high insurance premiums
The Transport Select Committee has issued another report into the reasons why our motor insurance premiums keep going up.
The Government's Transport Select Committee has called for an end to “sharp practices” in the motor insurance industry and a higher threshold for paying out for whiplash claims.
In a follow-up report to its initial investigation into the rising cost of motor insurance, the committee blames the rise in personal injury claims for the increase in insurance premiums.
And it argues that if raising the threshold for paying out compensation doesn’t reduce the number of claims, the Government should introduce legislation. It proposes that this legislation would require evidence of both the whiplash injury itself and the negative effect it is having on the claimant’s life before compensation is paid out.
It’s asked the Government to ban referral fees, where people or companies sell on insurance claimants’ details, “across the board”, rather than just in personal injury cases. The ban for personal injury claims is part of proposed legislation currently being reviewed by the House of Lords.
It also wants the Government to begin an investigation into cold calling to generate personal injury claims. The Office of Fair Trading (OFT) says that the average referral fee is £800.
Government figures show that the number of personal injury claims resulting from motor accidents has risen by a staggering 70% since 2005-06. And 70% of those claims are for whiplash.
The committee also highlighted fraud and uninsured driving as two areas that need to be tackled in future.
In December, the OFT announced that it would be investigating the motor insurance industry. It’s due to report back in the spring.
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More: 25 ways to cut your car insurance | The great car insurance rip-off
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I would not support a reduction in the national speed limit on motorways. It was only introduced to reduce fuel consumption and is very arbritary. As cars have got safer and more reliable and have better brakes, ABS, ESP etc etc why not increase the speed limit? To me it makes sense, BUT I would also prefer that the driving standards required to pass the test were higher, and also repeat tests every (say) 10 years - or a compulsory refresher course. Bejasus - just goes to show what parasites the legal world are.
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The government desperately love the motor industry. Why else would they have given incentives to buy cars when the public stopped doing so? Green issues would have us not driving. the fact is motorist put £50bn+ in the exchequer each year and the chancellor needs that money like an addict needs a fix. So they will do nothing to discourage driving. They are only making noises now about insurance because it may put some drivers off buying into their racket. Think raising the limit to 80mph, how crazy is that? I say reduce it to 60mph. It is in Oregon in the USA and they manage fine.
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Hello bejasus, I'm sorry to hear you've had such a terrible time over the last couple of years. It sounds horrendous. I hope you get some compensation eventually. I've often thought that men shouldn't be allowed to drive until they reach 21. It would save lives and injuries, and make the world a more pleasant place for the rest of us to live in. Never going to happen though. Regards, Ed
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13 January 2012