AA says the main issue for the Government to get to grips with in terms of spiralling car insurance premiums is to kill the compensation culture – full stop.
Prime Minister David Cameron MP was today expected to tell insurance companies that they must play their part in tackling soaring car insurance costs, which has been fuelled by sharply-rising whiplash injury claims.
According to the AA’s benchmark British Insurance Premium Index, the average Shoparound quoted premium for a comprehensive car insurance policy rose by 15% over 2011 and by 33.2% over 2010.
Simon Douglas, director of AA Insurance says: “I believe that the insurance industry is committed to keeping premiums as competitive as possible: but as the gap between premium income and claims payments has widened because of soaring fraud and personal injury claim costs, premiums have had to rise for everyone.
Britain’s leading car and home insurance broker has provided evidence to both the Transport Committee and Office of Fair Trading inquiries into rising car insurance premiums and has consistently called on the Government to:
- Overhaul the whole claims culture to manage the proliferation of personal injury and accident management firms that encourage people involved in no-fault collisions to make injury claims, even if they have not suffered injury
- Ban personal injury law and accident management firms from cold-call advertising, which encourages people who might not otherwise have done so, to make claims
- Overhaul young driver training and introduce driving safety into the national curriculum, as well as improving the driving test and post-test courses. Courses such as the AA-sponsored BTEC in driving science helps to produce safer young drivers
Mr Douglas says: “A claims culture has developed in this country to the extent that it has become accepted that if another vehicle hits your car, you should make an injury claim regardless of how serious the injury is. The government recognises this and the Justice Minister has already put forward proposals to overhaul the legal claims processes which we wholeheartedly support.
“I’m pleased that Mr Cameron has chosen to highlight the issues in this way. It shows that the Government is taking fast-rising premiums seriously and wants to find ways to control costs such as personal injury claims and fraud which have been the main drivers or rising premiums.”
Young drivers
Mr Douglas has also welcomed Mr Cameron’s interest in ‘pay-how-you-drive’ technology to help young drivers reduce their insurance costs.
“Young drivers have seen their premiums rise faster than average because proportionately, they are taking the biggest share of serious injury claims, especially young men,” he says.
Mr Douglas believes that ‘smart box’ or telematic insurance that measures driving performance will help to improve road safety for young and inexperienced drivers especially. Such insurance will become increasingly relevant after a European Court of Justice gender ruling takes effect. From 20 December, insurers will no longer be able to use gender when calculating insurance premiums.
“Telematic insurance, such as the AA’s new Drivesafe pay-how-you-drive cover, is genuinely gender-neutral – it rewards safe driving behaviour regardless of whether you’re male or female. It places firmly in the hands of the driver safe and responsible driving, which is rewarded by reduced premiums.”
