Insurers Accused Of ‘Cheating’ DriversAugust 31, 2016
Insurance companies have been accused of “cheating” drivers by ramping up premiums even though the amount of cash they pay out has plummeted.
In a damning front page story, The Times newspaper claimed insurers have failed to live up to their promises to pass on savings to the public.
The Association of Personal Injury Lawyers, which represents injured people, says the industry’s compensation bill fell by a staggering £500m in both 2014 and 2015, making a total saving of £1bn.
Premiums have continued to rise, however, with another 20 per cent added on to the average quote in the last year alone. That’s an extra £115 that each motorist has had to pay for cover.
Not only has the total number of claims submitted fallen for two years running, but the average payout, including legal costs, is down £751 since 2013.
The drop is being credited to steps taken by the government to reduce the number of fraudulent whiplash claims.
A spokesman for the Association of British Insurers claimed its members had already overcompensated for anticipated savings before the measures came into effect and the market was now righting itself.
But Labour MP for Liverpool Riverside Louise Ellman, who chairs the House of Commons’ Transport Select Committee, told the paper that insurers had failed to honour promises to slash premiums in response to falling costs.
James Pritchard, a personal injury specialist at Macks Solicitors, said he wasn’t at all surprised by the figures.
“For far too long the media has been putting the blame on innocent accident victims and the solicitors fighting their corner for the rising cost of the car insurance premiums the rest of us have to pay,” he said.
“These figures make it plain that this is simply not the real story – the fact is that the increases are the responsibility of insurance companies who put the profits of their shareholders before providing a fair deal to their customers.
“It’s encouraging to see national newspapers turning the tables on the insurers at last, instead of simply swallowing the scare stories put out by the industry and scapegoating people who are in the unfortunate position of having to make a claim.”