Prime Minister promises action on car insurance

| February 14, 2012 | 0 Comments
Prime Minister promises action on car insurance

David Cameron is attending an insurance summit at Downing Street today in an effort to tackle Britain’s reputation as “the whiplash capital of Europe”.

It is estimated that claims for whiplash injury following accidents are adding £90 a year on average, to car insurance premiums, which have risen by an average of 17% over the last year.

Britain’s “compensation culture” encourages motorists to submit claims even for trivial injuries and many claims are for excessive amounts, generating around £2bn a year in costs for insurance companies.

Although accident rate have fallen by 16 per cent over the last three years, whiplash claims have risen by a third.

David Cameron is expected to outline proposals to protect companies being sued for trivial or excessive claims in return for a reduction in the cost of motor premiums.

Plans by the Commons Transport Select Committee for a higher threshold in order to claim for whiplash injury will be discussed.

This may involve the introduction of tighter criteria including a minimum driving speed below which any whiplash claim could be rebutted, as well as medical evidence from independent experts.

The use of ‘black-boxes’ to monitor young drivers, reforms to the ‘no win, no fee’ system and a cut in the amount solicitors can charge for small personal accident cases, will also be discussed.

Industry representative at the summit will include the Association of British Insurers and insurance firms Admiral, AXA, Aviva, CFS, RBSI and Zurich.

With changes being introduced this year that could push premiums even higher for certain groups, the summit has come at a key time.

A landmark ruling by the European Court of Justice could see the cost of insurance rising for women, who have traditionally benefited from cheaper insurance premiums than men because of their safer driving record.

However, following a case brought by a Belgium-based consumer group, the European court ruled that it is unfair to assess car insurance premiums based on gender.

The ruling will come into force in December.

Tags: compensation culture, insurance summit, , , women drivers

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