Car insurance news inside! I am now less busy so more news shall follow as usual.

Insurance premiums could fall

UK drivers overwhelmingly want to see the back of the personal injury (PI) ‘compensation culture’ that is now costing every motorist an extra £118 on their annual motor insurance premium, reveals the reporters in a new report issued today.

The report 'Road to Reform: Reducing Motor Premiums by Reforming the Personal Injury Claims Process’ is launched ahead of the Ministry of Justice Whiplash Consultation closing on the 8th March 2013. The report sets out that proposals to improve the motor insurance PI claims system and reduce excessive costs that have contributed to premiums rising by 80% since October 2008. The research has also found that if insurers handled claims directly, an estimated £1.5bn of excess cost could be stripped from UK motor insurance premiums.


Ridding the rubbish

Central to the proposals for reform is its call for a legal requirement on PI claimants to contact the ‘at fault’ insurer in the first instance rather than going to or being referred to intermediaries including claims management companies and PI lawyers. This will result in a halving of the cost per claim as third party legal fees (average current legal fee is £2500 for a ‘typical’ whiplash claim) are removed from low-value personal injury claims, a saving that will benefit all motorists in reduced premiums. 
The research shows that there is no difference in the compensation awarded to the injured party if handled directly or via third parties. However, the multiple third parties that can get involved in a claim add significant cost in fees. They estimates that handling claims directly will cut £1.5bn of excess cost, approximately 50% of the current cost of handling the 550,000 whiplash claims received by insurers every year. This cost reduction could lead to premium falls of around £60 a year for the average driver.