In recent years personal industry solicitors have taken much of the blame for increased car insurance premiums. Insurance companies have consistently argued that increasing personal injury claims and costs are the reason for increased car insurance premiums. So successful were their media campaigns and political lobbying that a few years ago the Government reformed the procedure for road traffic accident claims, part of which reduced the legal fees recoverable by personal injury solicitors.
However, a recent investigation into rising premiums by the Office of Fair Trading has revealed an altogether different explanation for increasing premiums.
The OFT has provisionally decided to refer the motor insurance industry to the Competition Commission after it discovered “dysfunctional” practises committed by the insurance companies, said to increase car insurance premiums by £225 million per year.
To read the full OFT article please visit the below link:
The OFT found that, when acting for “not at fault” drivers involved in accidents, insurance companies are free to generate increased costs through work referral deals and rebates, payable by the insurer of the “at fault” driver. The OFT suspects that such practises may be a key reason for increased premiums and has therefore referred the matter to the Competition Commission for full investigation.
Personal injury solicitors have taken much of the blame in recent years over increased insurance premiums but are all too aware of the dysfunctional and wasteful approaches adopted by insurance companies when dealing with claims. Whether it’s denying liability for a claim in which there is no prospect of a successful defence, or making unrealistically low offers to settle claims, personal injury solicitors see costs, and time, increased needlessly at every turn.
I believe that if claims are dealt with sensibly and efficiently costs, and therefore premiums, will decrease. Hopefully the OFT’s findings will lead to reform throughout the insurance industry and allow the victims of road traffic accidents to be compensated quickly and fairly, and without unfair blame for increasing premiums.
If you or a member of your family has been involved in an accident which has resulted in you sustaining injury and would like a free and confidential discussion with one of our specialised Solicitors, please do not hesitate to contact us on 0800 389 1978 or visit our website at www.forsterdean.co.uk. You can also follow us on Twitter (@ForsterDeanLtd) and find Forster Dean Solicitors on Facebook
James Winterbottom LLB (Hons)
Office Manager and Personal Injury Solicitor
Published 6th June, 2012