At last some good news for the hard-pressed motorist. Amidst the seemingly ever increasing costs of keeping a vehicle on the road, the AA reports that insurance premiums actually fell in the third quarter of 2012.
The cheapest policies bought directly from car insurance companies in the UK fell by nearly 3%. This is encouraging news for drivers following several years of large increases. According to Simon Douglas of AA Insurance, although costs of claims are still rising, stiff competition among insurers has been putting pressure on premium levels.
Two major shake ups within the motor insurance sector are due to come into effect in the next few months.
Firstly, following the European Court of Justice ruling on equal opportunities within the insurance profession, from 21st December 2012, companies will no longer be able to offer cheaper premiums for female drivers. Some premiums are forecast to rise by 25% although male drivers may benefit from small reductions.
The law on referral fees, whereby insurance providers sell on personal details of claimants to third parties, is being revised from April 2013. It will become unlawful for insurers to sell details of accident victims to claims management companies or No Win No Fee law firms.
Additionally, claimants using conditional fee arrangements will no longer be able to claim legal fees from the losing party; they will be responsible for paying their own costs from their compensation payments.
It is suggested that these revised arrangements for No Win No Fee claims will effectively reduce current levels of claims, leading to insurance companies passing on savings to policyholders through lower premiums. This, of course, remains to be seen, but the current downward trend in premium fees is certainly a positive sign.
One of the most common claims to car insurance companies in the UK is for whiplash injuries. Almost 1,200 whiplash claims are made every day. The government has announced that it will consult on how to reduce the numbers of claims, many believed to be fraudulent, that are taken to court.
Insurers have identified whiplash claims as one of the major causes for rising car insurance costs. Mr Douglas explains that insurance companies find it difficult under current legislation to challenge potentially fraudulent claims because it is hard to prove whether or not a claimant has suffered.
Possible changes to the handling of whiplash claims include raising the small claims limit from £1,000 to £5,000 in order for cases to be dealt with at county court level, thereby reducing costs.
The Association of Personal Injury Lawyers (APIL has drawn up a ten point plan to help fight fraudulent claims.
1. Information on fraud to be freely available to all parties to help identify fraudsters. At present, personal injury lawyers do not have access to the Insurance Fraud Bureau (IFB) database. Making this data available more widely available will help to identify claimants with a history of fraudulent claims.
2. Claimants to be subject to a legally binding statement of truth. No guarantee that the claimant will be telling the truth but at least fraudsters subsequently found to have lied will be subject to prosecution.
3. Ban insurers from paying compensation without medical evidence.
4. No offers of gifts or cash to potential clients to be made by any party.
5. Enforcement of future ban preventing insurers from selling claimants’ details.
6. Identities of potential expert witnesses to be shared by both sides.
7. New guidance to help medics identify and understand whiplash injury.
8. Photo ID to be provided when attending a medical.
9. Claimant solicitor to organise access to relevant medical records.
10. Spam texting to be banned.
It would seem that the Government, UK car insurance companies and Personal Injury Lawyers are all working towards a common goal: to reduce unnecessarily high premiums by attacking fraudulent claims. That can only be more good news for motorists.