RE: OFT To Probe Spiralling Car Insurance
Thursday 8th September 2011
The Office of Fair Trading is going to probe the rising cost of motor insurance, it has announced today.
1) Personal injury claims. The ABI says the number of bodily injury claims received by insurers rose by 72% between 2002 and 2010
If you've got something to say about the issue - the OFT 'call for evidence' is here. Or you could join us for a rant in the forums...
OFT To Probe Spiralling Car Insurance
Industry blames blood-sucking lawyers, fraudsters and the uninsured...
"UK annual comprehensive car insurance premiums are reported to have risen by as much as 40 per cent in the year ending 31 March 2011," the OFT says, adding it wants to establish the full facts, the reasons behind any increase, and whether there are any consumer or competition issues that need to be addressed to improve the functioning of the market.
The Association of British Insurers has been quick to leap in with a response, and a list of cost pressures it says are impacting on insurance premiums. It makes startling reading, and if true doesn't paint a very rosy picture of the current set-up. Here's their list:
2) Excessive legal costs. For low value personal injury motor accident claims, for every £1 insurers pay in compensation, a further 87 pence is paid to claimant lawyers. UK consumers pay £2.7million every day to claimant lawyers through their motor insurance premiums - that is 10% of every motor premium.
3) 'Crash for cash' staged accidents and other insurance frauds, including fake whiplash claims. Last year insurers detected 40,000 fraudulent motor insurance claims worth £466 million.
4) Uninsured driving. The cost of compensating the victims of accidents involving uninsured drivers is £500 million a year, paid for by honest motorists through their insurance premiums.
Discussion
About time, but a tenner says they don't actually do anything, the personal injury claims are being perpetuated by the insurance companies by giving the information to the ambulance chasers and the lawyers are loving it.
And the DVLA know exactly which cars are insured and which ones aren't, what are they doing about it, oh I know, selling data to ambulance chasers
And the DVLA know exactly which cars are insured and which ones aren't, what are they doing about it, oh I know, selling data to ambulance chasers
thewheelman said:
How the hell do uninsured drivers get away with it? I thought many of the fixed cameras flagged these cars up?
It's the problem with every electronic system though - it only knows about law-abiding, legitimate people. It doesn't stop people driving uninsured in the same way that ID cards wouldn't stop terrorists. Either the car is registered insured to someone else, in which case it won't show up as dodgy, or the car will be completely off the radar, in which case they'll be able to determine that it's uninsured, but won't know who to go to to chase it up, especially if it's picked up by a remote camera and there's no police presence in the area.
redchina said:
what does a car crash in Australia many years ago (the Ferrari photo) have to do with UK car insurance?
(Outside the Windsor Hotel in South Perth)
Picture three doesn't look like the UK either!!
The driver emigrated because he couldn't afford UK premiums. (OK, I'm guessing...)(Outside the Windsor Hotel in South Perth)
Picture three doesn't look like the UK either!!
My mini rant about insurance
Guy hits me from behind. Admits liability on road side, changes his mind later and concocts a story about me pulling out of a diveway.
I go to credit hire and vehicle is repaired after sitting on my drive for 2 months, with me in a credit hire vehicle for 3 months. Hire charges astronomical.
After the other insurance co. flatly deny the claim I present them with the independant witness evidence (which the credit hire people had all along) and suddenly they paid for everything.
Had their client not made up a story they could have just paid for the repair (5kish) and sent me a loan car for a month, at their own rates.
So why oh why do they not go back to their insured who lied on a legal document about the accident (the claim form) and make him pay for the difference in costs?
I'll tell you why, cos they just put premiums up instead and then everyone else can pay. Just like they will continue to do in the future, so in the long term it never affects them.
If there was an insurance company who guaranteed to investigate claims properly rather than paying them cos its administratively cheaper, charge people who cause extra costs through their lies so the rest of their customers don't end up paying, demand more stringent proof of incapacity through accidents before paying and had more of a common sense approach then I would use them. I think other people would too.
Guy hits me from behind. Admits liability on road side, changes his mind later and concocts a story about me pulling out of a diveway.
I go to credit hire and vehicle is repaired after sitting on my drive for 2 months, with me in a credit hire vehicle for 3 months. Hire charges astronomical.
After the other insurance co. flatly deny the claim I present them with the independant witness evidence (which the credit hire people had all along) and suddenly they paid for everything.
Had their client not made up a story they could have just paid for the repair (5kish) and sent me a loan car for a month, at their own rates.
So why oh why do they not go back to their insured who lied on a legal document about the accident (the claim form) and make him pay for the difference in costs?
I'll tell you why, cos they just put premiums up instead and then everyone else can pay. Just like they will continue to do in the future, so in the long term it never affects them.
If there was an insurance company who guaranteed to investigate claims properly rather than paying them cos its administratively cheaper, charge people who cause extra costs through their lies so the rest of their customers don't end up paying, demand more stringent proof of incapacity through accidents before paying and had more of a common sense approach then I would use them. I think other people would too.
Prevent the ambulance-chasing, scumbag claims companies getting info from the insurers!
Mrs BL had a slight coming-together a few months ago - someone went into the back of her when she was stopped at a red light FFS. No-one injured, minor, cosmetic damage to the back of her car, fixed under the other driver's insurance but for months afterwards, she was getting calls from claims companies telling her to claim for physical injury!
Cooking up a false insurance claim is bad enough but to systematically and patently encourage others to should be illegal and punishable with fines or imprisonment to eradicate this unpardonable corruption.
Mrs BL had a slight coming-together a few months ago - someone went into the back of her when she was stopped at a red light FFS. No-one injured, minor, cosmetic damage to the back of her car, fixed under the other driver's insurance but for months afterwards, she was getting calls from claims companies telling her to claim for physical injury!
Cooking up a false insurance claim is bad enough but to systematically and patently encourage others to should be illegal and punishable with fines or imprisonment to eradicate this unpardonable corruption.
The guy who was on BBC News this morning listed the same reasons as the ones in the article and concluded that this means about 100 quid per policy. How this constitutes 40% increase from the last year I don't know.
100 quid are certainly not 40% of my insurance premium. (more like 15%).
100 quid are certainly not 40% of my insurance premium. (more like 15%).
BuzzLightyear said:
Prevent the ambulance-chasing, scumbag claims companies getting info from the insurers!
Mrs BL had a slight coming-together a few months ago - someone went into the back of her when she was stopped at a red light FFS. No-one injured, minor, cosmetic damage to the back of her car, fixed under the other driver's insurance but for months afterwards, she was getting calls from claims companies telling her to claim for physical injury!
Cooking up a false insurance claim is bad enough but to systematically and patently encourage others to should be illegal and punishable with fines or imprisonment to eradicate this unpardonable corruption.
.Mrs BL had a slight coming-together a few months ago - someone went into the back of her when she was stopped at a red light FFS. No-one injured, minor, cosmetic damage to the back of her car, fixed under the other driver's insurance but for months afterwards, she was getting calls from claims companies telling her to claim for physical injury!
Cooking up a false insurance claim is bad enough but to systematically and patently encourage others to should be illegal and punishable with fines or imprisonment to eradicate this unpardonable corruption.
I agree.
There should be a limit imposed on compensation claim amounts, and absolute proof required, up to CPS standards.
Compensation lawyers and those employed in the industry that has built up around them are nothing but bloody parasites.
SEVERE punishments for the uninsured and fraudsters need to be introduced, instead of the present slap on the wrist. Minimum ban 5 years, and a proper prison sentence for repeat offenders.
Edited by grahamw48 on Thursday 8th September 11:27
dvance said:
The guy who was on BBC News this morning listed the same reasons as the ones in the article and concluded that this means about 100 quid per policy. How this constitutes 40% increase from the last year I don't know.
100 quid are certainly not 40% of my insurance premium. (more like 15%).
UP to 40 per cent. And it's an average. Everybody's policy is different - some people are paying £250, some people are paying £2,550, so it's an average across the board. 100 quid are certainly not 40% of my insurance premium. (more like 15%).
Oddly enough, at £450, my insurance premium is actually 50 per cent cheaper this year. Look at the difference between the two of us - God knows how many different variables that average encompasses.
Edited by pthelazyjourno on Thursday 8th September 11:29
On the "how ambulance chasers get your details" thing - they're more likely get it from the Police than your insurer...
Many Police Forces have an arrangement whereby they get a kickback for every referral they make - they have to clear-up an accident scene and where a driver is unable to arrange for his insurer to step-in (as they're on their way to hospital or prison) the Police will arrange recovery and those details tend to end-up with the ambulance chasers...
The biggest problem isn't really the level of claims which are made tho - it's the level of overhead involved in those claims and the way the cost isn't really reflected on the person using the service.
Because costs are added on-top of compensation and expense there's no "market" here - the companies can charge what they like. If you were to change the law to force them into extracting their costs from the actual compensation they reclaim THEN they'd have to compete on a level playing field and THEN you'd get that bulls
t under control.
Many Police Forces have an arrangement whereby they get a kickback for every referral they make - they have to clear-up an accident scene and where a driver is unable to arrange for his insurer to step-in (as they're on their way to hospital or prison) the Police will arrange recovery and those details tend to end-up with the ambulance chasers...
The biggest problem isn't really the level of claims which are made tho - it's the level of overhead involved in those claims and the way the cost isn't really reflected on the person using the service.
Because costs are added on-top of compensation and expense there's no "market" here - the companies can charge what they like. If you were to change the law to force them into extracting their costs from the actual compensation they reclaim THEN they'd have to compete on a level playing field and THEN you'd get that bulls
t under control.I got hit back in Feb, other driver's fault, he admitted it and his insurance company did not try to contest it when mine raised the claim with them. All sorted, altho their "approved" repair company made an arse of the respray and had to do it again. In total I was in a hire car at the other guys' insurance company's expense for three weeks. If the "approved" repair company had just gotten on with it and done the job right in the first place I could easily have been back in my own car within a week.
That's not the worst of it tho. In the week or so after reporting the crash to my insurance company I had a call from one personal injury lawyer trying to persuade me to raise a personal injury claim, and a letter from another not only telling me how much I could win but trying to offer me £500 in cash or vouchers to raise the claim!
These ambulance chasers could only have gotten my contact details from one or other of the insurance companies involved, so when they bleat on about how the increase in personal injury claims are affecting our premiums I can't help but think they've created this situation themselves - or are using it as an excuse for driving up premiums. But then I guess they probably get a fee for every contact they sell to these guys as well so their quids in again, and we foot the bill.
And people think that banks are crooked...
That's not the worst of it tho. In the week or so after reporting the crash to my insurance company I had a call from one personal injury lawyer trying to persuade me to raise a personal injury claim, and a letter from another not only telling me how much I could win but trying to offer me £500 in cash or vouchers to raise the claim!
These ambulance chasers could only have gotten my contact details from one or other of the insurance companies involved, so when they bleat on about how the increase in personal injury claims are affecting our premiums I can't help but think they've created this situation themselves - or are using it as an excuse for driving up premiums. But then I guess they probably get a fee for every contact they sell to these guys as well so their quids in again, and we foot the bill.
And people think that banks are crooked...
pthelazyjourno said:
UP to 40 per cent. And it's an average. Everybody's policy is different - some people are paying £250, some people are paying £2,550, so it's an average across the board.
According to an article that I cannot lay hands on atm, the average FC premium in the UK (2009) was £460ishFor every berk shelling £1500 to insure a clapped-out Rover with 18s on it, there's 10 people like me driving a shed which cost well under £300 or with an insurance history which insures anything for under £400...
It's worth remembering that most 'flash' cars are on specialist/multi-car policies which don't get included in such figures too.
johnpeat said:
According to an article that I cannot lay hands on atm, the average FC premium in the UK (2009) was £460ish
For every berk shelling £1500 to insure a clapped-out Rover with 18s on it, there's 10 people like me driving a shed which cost well under £300 or with an insurance history which insures anything for under £400...
It's worth remembering that most 'flash' cars are on specialist/multi-car policies which don't get included in such figures too.
Interesting. I'm paying pretty much bang on the average then!! Pretty much always have done over the last decade, only last year which shot up to £900 due to a claim and change of car, and now back down to £450ish again. For every berk shelling £1500 to insure a clapped-out Rover with 18s on it, there's 10 people like me driving a shed which cost well under £300 or with an insurance history which insures anything for under £400...
It's worth remembering that most 'flash' cars are on specialist/multi-car policies which don't get included in such figures too.
amirzed said:
My mini rant about insurance
Guy hits me from behind. Admits liability on road side, changes his mind later and concocts a story about me pulling out of a diveway.
I go to credit hire and vehicle is repaired after sitting on my drive for 2 months, with me in a credit hire vehicle for 3 months. Hire charges astronomical.
After the other insurance co. flatly deny the claim I present them with the independant witness evidence (which the credit hire people had all along) and suddenly they paid for everything.
Had their client not made up a story they could have just paid for the repair (5kish) and sent me a loan car for a month, at their own rates.
So why oh why do they not go back to their insured who lied on a legal document about the accident (the claim form) and make him pay for the difference in costs?
I'll tell you why, cos they just put premiums up instead and then everyone else can pay. Just like they will continue to do in the future, so in the long term it never affects them.
If there was an insurance company who guaranteed to investigate claims properly rather than paying them cos its administratively cheaper, charge people who cause extra costs through their lies so the rest of their customers don't end up paying, demand more stringent proof of incapacity through accidents before paying and had more of a common sense approach then I would use them. I think other people would too.
Well said.Guy hits me from behind. Admits liability on road side, changes his mind later and concocts a story about me pulling out of a diveway.
I go to credit hire and vehicle is repaired after sitting on my drive for 2 months, with me in a credit hire vehicle for 3 months. Hire charges astronomical.
After the other insurance co. flatly deny the claim I present them with the independant witness evidence (which the credit hire people had all along) and suddenly they paid for everything.
Had their client not made up a story they could have just paid for the repair (5kish) and sent me a loan car for a month, at their own rates.
So why oh why do they not go back to their insured who lied on a legal document about the accident (the claim form) and make him pay for the difference in costs?
I'll tell you why, cos they just put premiums up instead and then everyone else can pay. Just like they will continue to do in the future, so in the long term it never affects them.
If there was an insurance company who guaranteed to investigate claims properly rather than paying them cos its administratively cheaper, charge people who cause extra costs through their lies so the rest of their customers don't end up paying, demand more stringent proof of incapacity through accidents before paying and had more of a common sense approach then I would use them. I think other people would too.
Adrian W said:
About time, but a tenner says they don't actually do anything, the personal injury claims are being perpetuated by the insurance companies by giving the information to the ambulance chasers and the lawyers are loving it.
Referral fees are likely to be banned. Admiral's share price dropped 15% recently on news that the ABI and the Law Soc were both lobbying hard to have them removed.Gassing Station | General Gassing | Top of Page | What's New | My Stuff