Not only is the cost of motor insurance rocketing, some drivers are now refused cover because of where they live.
Certain areas of the country are blacklisted due to the high number of fraudulent personal injury claims submitted and this has led to motorists being priced out of the market.
The latest data from the Insurance Fraud Bureau shows that large cities pose the highest risk of fraudulent claims for personal injury compensation from RTAs. Birmingham has the dubious honour of the number one spot, followed by Liverpool and Manchester.
Greed is the number one basis for the fraud committed by organised gangs, whilst opportunist fraud is all about need and greed, said Glen Marr, a director at the IFB.
Insurance is based on risk and insurance companies use different formula to set their prices. But generally, the riskier the area, the higher the premium.
Ambulance chasing personal injury solicitors have take a large share of the blame for escalating motor insurance costs.
Claims management companies and personal injury lawyers use aggressive advertising techniques to persuade people who have had an accident to make a personal injury claim. The average compensation payout is £2,340 and under the no win no fee system, claimants will not be out of pocket even if their claim is unsuccessful.
The lawyers earn a success fee if they win and they can take out an insurance policy to cover against losing a case. With the average legal costs of £2,100 being added to the cost of every claim, it’s easy to understand why insurance companies keep on increasing premiums.
UK roads are the safest in Europe and yet we have four times more claims for whiplash injuries than any other nation and this adds about £30 a year on to the average motorists’ car insurance premium. Uninsured drivers add another £40 on average and this money goes to the Motor Insurance Bureau.
Until the government can stamp out insurance fraud and driving without insurance, unfortunate motorists are going to be stuck with excessive premiums.