Motorists will be dismayed to learn that car insurance premiums are set to rise by 30% this year.
Insurance companies say the industry has been left out of pocket to the tune of £2 billion after the number of personal injury claims filed by no win no fee solicitors soared.
Peter Roberts, from the Drivers’ Alliance, claims that unscrupulous personal injury solicitors are just out to make a fast buck and calls for measures to be taken to stamp out the practice. He points out that motorists are already paying the highest fuel prices ever and the last thing they need is higher insurance costs.
The AA’s Ian Crowder agrees that people involved in traffic accidents should receive personal injury compensation but he says we seem to be in an ‘open season’ where claims management companies are touting for business from anybody, regardless of whether or not they’ve been injured.
Exaggerated claims are becoming commonplace and no win no fee companies use aggressive marketing methods to put over their message, he continued. The economic crisis has left a lot of people hard pressed for cash and they are tempted by stories of high compensation awards.
For every £1 the insurance companies take in, they now pay £1.20 out due to this surge in accident claims. About 200 personal injury claims per day arrive with the insurance companies and some are for accidents that occurred as far back as three years ago.
The UK has the lowest number of recorded crashes per capita but four times as many claims for whiplash than any other European country.
The average compensation award for a victim of a car accident is £2,340 and the average legal cost per claim is £2,100.