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Accident Lawyers Are Driving up Car Insurance Bills



According to the AA’s British Insurance Premium Index, the average car insurance policy has risen from £594 - £629 over the last year. The reasons for this are that cars are safer now and therefore more people survive accidents even though they may sustain terrible injuries, and, it is ten times more likely that a 17 – 21 year old male driver will have a crash than a 30 year old and as a result will then find it very difficult to get any cover at all.

The Consumer Prices Index says that this is an increase of £70 in a year or 5.9%, much higher than inflation at 2.1%. Even moderate risk policy holders are seeing premiums rise by several hundred pounds when they are already paying from £1,000 to up to £2,200 a year. The word is that premiums will continue to rise up to 15% and this is blamed on the compensation culture.

Claims for injury are rising by 10% a year due mainly to claims taking far too long to be settled and the feeling is that they should take no longer than 6 months. Malcolm Tarling from the Association of British Insurers says, 'Too often lawyers are involved when there is no need. We are pushing the Government to introduce a more streamlined procedure for dealing with the smaller, simpler personal injury claims of under £25,000. We want a radical shake up.' The cost of car repairs is also pushing premiums up by a further 5% because cars are more technical nowadays and parts are more expensive.

However, there is some relief in knowing that due to the fierce competition for customers that insurers are not passing all the increasing costs onto the motorist, otherwise the increase would be closer to 50%.

Insurers pay another 43p on top of every £1 paid in compensation in legal costs – this equates to 10% of every premium and is ‘excessive’, says the ABI. This means that of the £8.4 billion total gross premium income that £840 million is swallowed by legal costs.

Insurance director at the AA British Insurance Premium Index, John Close acknowledged that since 1994 premiums have doubled, 'The main factor is personal injury claims,' and, he added, safer cars are more costly to mend.

'The main factor is personal injury claims,' he said, adding that greater safety features, such as bigger crumple zones and more air bags meant cars cost more to fix. 'The irony of this is that you are much less likely to be killed in an accident - and therefore more likely to make a personal injury claim.'

Here some shocking truths about motor insurance today:-

A female 17 year old could pay up to £2,359 to drive a Ford Fiesta if she can find an insurer and the cheapest quote was £1,000 plus

The AA says that approximately 50% of insurers don’t quote for drivers under 21 and less than 25% will quote for 17 year olds.

Premiums won’t necessarily drop as you get older even with no-claims bonus.

Increasing premiums will make no-claims worthless and those with a full bonus can expect around a 64% discount on the full cost of their premium.
About Author Sheila Challiner :

On-Track-Insurance provide great deals on ( http://www.on-track-insurance.co.uk ) car insurance for its clients in the uk. Please visit our site for helpful information to aid you in making the right decision, first time. Visit Our sister site Brokers Online at ( http://www.life-assurance-bureau.co.


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Article Added on Friday, January 30, 2009
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