Insurers slam government over price of car insurance coverage

The government is “putting young lives at risk and growing the cost of motor insurance” by failing to introduce reforms such as a graduated driving licence, the Association of British Insurers (ABI) stated this week.

The insurance coverage company trade physique says insurers have kept their side of a bargain set at a government and insurance sector “summit” 3 years ago, but that the government has broken the promises it produced.

James Dalton at the ABI mentioned: “While great progress has been created, more can be accomplished to help bring down auto insurance premiums, especially for young drivers.”

So what’s really going on?

Driving reforms

A single of the issues discussed at the summit was the price of personal injury claims to the insurance coverage sector – and, because expenses are reflected in premiums, its customers.

Whiplash claims alone had been pushing up the cost of vehicle cover for everyone by about £90 a year, according to insurer Aviva. And to make matters worse, a hefty proportion of such personal injury claims are recognized to be fraudulent.

That is why the government has because implemented civil justice program reforms developed to strip out excessive legal charges and crack down on frivolous and exaggerated claims.

Consumer savings

According to the ABI, such measures have enabled insurers to pass on total savings of nearly £600 million to their buyers.

Premiums for young drivers, however, have remained high due to the fact “measures to boost young driver road security have stalled”.

Young and dangerous

Drivers amongst 17 and 19 years of age make up just 1.5% of all licence-holders. But new motorists in this age group are involved in 12% of fatal or critical accidents.

Even young drivers who stick to the guidelines and keep protected face sky high insurance premiums as a outcome.

To save lives and lessen premiums, the ABI is consequently calling for the introduction of a ‘graduated’ driving licencing regime. It believes this will reduce the quantity of crashes involving young motorists.

“The Government’s continued failure to make meaningful alterations to improve young driver testing and instruction is not only placing their lives at risk, but keeping the expenses of motor insurance coverage for young drivers unnecessarily high,” Dalton said.

Claim fees

Other regions where the ABI believes the government could do much more to decrease insurance charges for motorists consist of sending much more individual injury claims to the little claims courts.

“The little claims track, with the suitable safeguards place in place, is a cost-efficient, simple and speedy way of settling decrease worth individual injury claims,” mentioned Dalton, who would like to see the modest claims limit raised from £1,000 to £5,000.

Insurers also want much more to be completed to clamp down on rogue claims management organizations that bother potential consumers with nuisance calls and persuade them to make frivolous claims.

And Aviva is calling for a total rethink of whiplash claims so that motorists with genuine injuries are presented rehabilitation rather than cash handouts.

“This will aid the genuine injured celebration return to overall health while cutting the expense of motor insurance coverage by at least £32 for everybody,” it mentioned.

Insurers slam government over price of car insurance coverage