The price of an average motor insurance premium has seen a record fall of more than £100 over the past year, according to the latest AA statistics. The Westminster Government says reforms to tackle the growth of compensation culture and help hardworking people have made a major contribution to this fall.
The government has now pledged to do more and it has welcomed assurances from the insurance industry that they will continue to do their part by passing on any savings that result from these reforms straight on to customers.
Despite the fall in average insurance premiums, recent figures from the Association of British Insurers have shown that the number of dishonest motor claims increased by 34% to a record 59,900 in 2013, with a value of £811 million.
A new package of measures to tackle insurance fraudsters and dishonest claims has been announced which will reduce the amount being paid out unnecessarily by insurance companies on fraudulent claims and enable them to pass on savings to honest customers.
These will affect bogus claims, both motor claims and others such as ‘trips and slips’ at work and in public places.
They include:
- Requiring courts to throw out compensation applications in full where the claimant has been fundamentally dishonest – to stop people who have had an accident from exploiting the system by making bogus claims or grossly exaggerating the extent of their injuries
- Plans to ban lawyers from encouraging people to make claims by offering them incentives like cash or iPads
- Reducing questionable whiplash claims by improving medical assessments, ensuring they are only conducted by independent accredited professionals, and setting fixed fees for medical reports this year
- Introducing new rules this year to restrict the practice of settling whiplash claims without confirmation of the claimant’s injury.
Justice Secretary Chris Grayling said: “We are making sure we do our bit to help drivers with the cost of running a car, and putting money back in their pockets.
“Insurance premiums have fallen by record amounts over the past year as we have turned the tide on the compensation culture but there is more to do. We are continuing to go after the fraudsters who force up costs for honest drivers.”
The new measures are the latest stage of the government’s delivery on the commitment to deal with high insurance costs made by the Prime Minister at an insurance summit in 2012. The latest Association of British Insurers average motor insurance premium tracker shows the average price of fully comprehensive insurance cover has reduced by 14% over the last year.
UK Government Roads Minister Robert Goodwill said: “The costs of owning and running a car are felt by millions of households and businesses across the country and this government is determined to help keep those costs down. Insurance premiums have fallen but we are keen to do more with the industry to drive down costs further.”
Association of British Insurers Director General Otto Thoresen said: “These changes are a very positive development for the vast majority of honest insurance customers who end up paying for the fraud of the minority. We applaud the decision to ban the distasteful advertising which offers cash or other inducements for personal injury claims. This only serves to reinforce to unscrupulous claimants that there is a compensation culture to exploit.”
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