A report from the Transport Select Committee detailed how car insurance companies are paid “referral” fees for giving lawyers the names of people eligible to .make car accident claims. These people may then be persuaded to sue for car accident claim compensation.
But the insurers’ association instead blamed the “compensation culture” for being behind the rise in legal costs and premiums. This seems especially dishonest, since it is the insurers who are encouraging claims, in order to make money!
“The committee has failed to recognise that the main cause of the recent increases in motor insurance premiums is ever-increasing personal claims and spiralling legal costs,” said Nick Starling from the Association of British Insurers (ABI).
The association said the rise in legal costs had added £40 a year to average motor premiums. It is apparent that the change in the Law, has resulted in insurers making more money, by trying to squeeze out independent car accident claims experts.
Aviva customer car insurance accident claims details stolen
Aviva is writing to tens of thousands of motorists after concerns that two employees sold details of people who had recently had accidents to accident claims companies.
Hundreds of them have since received calls from firms to persuade them to make personal injury claims. The employees have been dismissed and police have arrested two people on suspicion of fraud. Aviva has apologised to customers and alerted police
Kevin Rousell, head of the claims management regulation unit at the Ministry of Justice, said: “We do not tolerate bad practice from the companies we regulate and continue to drive malpractice out of the industry. We have closed down more than 200 rogue companies in the past year.
‘I informed my insurer about an accident without making a claim but it still raised my premium’
Insurers have been caught penalising their most honest customers by hundreds of pounds, treating notifications of incidents, or even queries about policies, as claims.
The threat to customers who don’t tell their insurer if something minor goes wrong is that their policy could be invalidated. But those who keep their end of the bargain with honest updates face paying more to renew if insurers get their facts wrong.
This happened to Umang Anand, of Marston Green, Birmingham. He contacted his insurer, Hastings Direct, after another driver bumped into his car in May last year. The British Insurance Brokers’ Association says: ‘When you phone your insurer to notify it or to find out how much the excess payment might be, the insurer will usually update their records with a notification code. That goes through to the Claims and Underwriting Exchange database.’
This database, covering motor, home and personal injury insurance, holds more than 32 million customer claims records and can be seen by 60 or so insurance companies. Any mistakes logged could result in customers paying far higher premiums through no fault of their own. But even if a notification is all that is recorded, some insurers will still price a policy higher.
Car crash victim? The cost of your insurance could rise as much as 30% – or by 50% if you had two not-at-fault accidents.
More than half of all insurers will hike the cost of your car insurance if you have a crash that was not your fault.In most cases firms will increase your yearly premium by around 8 per cent, according to figures seen by Money Mail. But some are bumping up their prices by as much as 30 per cent.
Meanwhile, separate industry figures suggest that if you have two not-at-fault accidents your premium could jump by as much as 50 per cent.
UK car insurance premiums fall by 12.5%
Rate reductions in the fourth quarter contributed to average annual savings on a comprehensive motor policy of £92 but selective price increases are beginning to appear, the most recent Confused index has shown.
Price reductions for third party, fire and theft cover were slightly more subdued, but still resulted in average annual savings of 7.5% (£85), the index showed.
Overall market prices continued to fall in the fourth quarter, but at a much lower rate than in previous quarters, reflecting repeated calls from within the industry for greater underwriting discipline after two solid years of price cuts.
Young men were the biggest winners from comprehensive price reductions in 2013, with 17-20 year olds seeing their premiums fall by 24%, something Confused attributed to to the Gender Directive implemented in December 2012.