Monday, January 16, 2012

Kill the compensation culture and cut the cost of insurance

Fraudulent claims – mostly for hard-to-assess "whiplash" injuries – add about £40 a year to every honest driver's motor insurance costs but Parliament will struggle to reduce this while some doctors, lawyers and police fail to act.

Following MPs’ latest inquiry into the high and rising cost of what many still regard as a ‘victimless crime’, Simon Douglas, a director of AA Insurance, was inclined to emphasise the positive. He said: “We must kill the compensation culture that has sharply driven up car insurance premiums. The recommendations from the Transport Committee are a positive step towards doing that.”

Insurance costs were rising by 40pc at one point last year but here are 10 tips to cut the cost of motor cover. The Transport Committee reported that the number of personal injury claims continues to rise despite a sharp fall in the number of collisions on Britain’s roads; and that about 70pc of these claims are for ‘whiplash’ injuries.

For example, one driver reversed into a space in a narrow street to allow an oncoming lorry to pass. In the process, she lightly clipped a parked car outside a shop. She sought the owner of the car who was inside the shop and details for the minor damage caused exchanged. The customer’s insurance company subsequently received a claim for £12,600 compensation for whiplash injuries suffered by ‘three people’ in the car. Read More