Association of Personal Injury Lawyers
A not-for-profit organisation representing injured people

Blog: Car insurance premiums - a matter of trust?

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Car insurance premiums - a matter of trust?
Neil Sugarman | 31 Aug 2016

Three years ago the Government introduced a raft of radical reforms to the way personal injury claims are handled on the strength that car insurance premiums would fall.

At an insurance summit held with the Prime Minister in February 2012, it was noted that insurance companies would pass on savings of approximately £1.5-£2 billion from the reforms. Yet in an email exchange between the Association of British Insurers (ABI) and the Cabinet Office just five days earlier the ABI said “We absolutely cannot commit to a percentage .....Furthermore, we cannot agree to a timeframe”.

But still, in 2013 the threshold for the portal for road accident claims was increased from £10,000 to £25,000 and the portal was extended to include claims for work accidents and public liability injuries. Solicitor’s fees for portal work were cut by more than half. Since this time further reform has resulted in the complete overhaul of medical reporting for whiplash cases, and fraud data is being shared between claimant and defendant lawyers.

Furthermore, the Government department with which all personal injury claims must be registered has reported a consistent downward spiral in whiplash claims. Since 2010/11 they have fallen by 41 per cent.

The ABI’s own figures show that since the 2013 reforms the cost of motor-related personal injury claims has fallen by more than six per cent.

Yet premiums have continued to rise.

Last year, the Government announced a plan to make further radical reforms which would mean  genuinely injured people would find it difficult – if not impossible – to claim compensation for their injuries. Again, this was based on the premise that car insurance premiums would fall. Former justice minister Lord Faulks told delegates at APIL’s annual conference earlier this year that insurers’ ‘feet will be held to the flames’ on this.

We say the latest proposals are unfair, unjust and unacceptable, and holding the insurers’ feet to the flames once the damage has been done is utterly pointless. The evidence clearly shows that whatever is responsible for premium hikes, it is not personal injury claims. We believe that to introduce the proposed reforms on the basis of promises which insurers have been breaking for years is, at best, naive. It is time to hold the insurance industry to account. 

Past blog entries

Accident and negligence: what’s the difference and why does it matter? , 02 Aug 2021
Patient safety problems risk waning public confidence in the NHS , 20 May 2021
Consumers will not benefit from Do-it-Yourself whiplash reforms, 28 Jan 2021
Effects of a change in the discount rate: what happens when a review is expected? , 16 Dec 2020
Three per cent drop in premiums does not reflect massive insurer savings, 09 Nov 2020
What help is out there for families when someone is injured?, 02 Nov 2020
Blindly heading into the unknown for injured people?, 09 Dec 2019
Lessons in looking after one another , 18 Nov 2019

About this blog

Neil Sugarman

Neil Sugarman is APIL's current president and is managing partner of GLP Solicitors in Bury. Neil has been involved closely in APIL’s work in the field of rehabilitation.