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Are spurious personal injury claims pushing up the cost of motor insurance?
An article in the motoring section recently talked about the rising cost of insurance. It failed to mention some of the reasons for these increases. 1) The high, almost obscene charges made by solicitors handling cases. 2) The attitude of repair garages, whereby the cost is pushed up if it is an "insurance job”. 3) The fraudulent claims, which in my experience are sometimes made by solicitors.
I had a minor accident a little time ago, in which another car damaged my nearside, and no one was even shaken up. Little damage was done and the other drivers insurance settled with no problem whatsoever. However, about two weeks later, I received a call from a firm of solicitors who put intense pressure on me to let them put in a further claim for whiplash and trauma. I told them in no uncertain terms where to go, but it goes to show that some of the fraudulent claims are because of money grabbing legal firms.
I had a minor accident a little time ago, in which another car damaged my nearside, and no one was even shaken up. Little damage was done and the other drivers insurance settled with no problem whatsoever. However, about two weeks later, I received a call from a firm of solicitors who put intense pressure on me to let them put in a further claim for whiplash and trauma. I told them in no uncertain terms where to go, but it goes to show that some of the fraudulent claims are because of money grabbing legal firms.
Asked on 20 November 2010 by RB, St Minver, Cornwall
Answered by
Honest John
You need to report this to the claims regulators: www.www.cueuk.org; www.ico.gov.uk; www.claimsregulation.gov.uk. I'm exposing part of this issue even if others have yet to cotton on. Basically, insurers, brokers, and now some car manufacturers, simply channel claims into 'accident management' outfits that are really car ‘credit hire’ operations. The damaged cars go in for repairs. Their drivers are delighted to be put into 'hire' cars of identical standard, but what they do not realise is that the repair will then be extended and delayed and if insurers do not foot the sometimes outrageous bill for the extended period of credit hire car, they themselves, become liable. I have seen cases of £27,000, £33,000 and as much as £40,000, just for the hire of a car.
I strongly suspect that vested interests (private equity firms) are behind this and that some of them own not only the insurance companies and the brokers but also the 'accident management' credit hire operations. It's the perfect business model for a legal scam. A completely captive market is forced by legislation into compulsory insurance. As insurers, as brokers and as credit hire operators, the investors get three bites of a big fat cherry that they can increase the size of at will, while smokescreening government with 'other' reasons for the rise in insurance premiums. Government is either involved in this, or too busy (or too stupid) to realise what is going on (just like the last Government was over the investment banking scandal).
I strongly suspect that vested interests (private equity firms) are behind this and that some of them own not only the insurance companies and the brokers but also the 'accident management' credit hire operations. It's the perfect business model for a legal scam. A completely captive market is forced by legislation into compulsory insurance. As insurers, as brokers and as credit hire operators, the investors get three bites of a big fat cherry that they can increase the size of at will, while smokescreening government with 'other' reasons for the rise in insurance premiums. Government is either involved in this, or too busy (or too stupid) to realise what is going on (just like the last Government was over the investment banking scandal).
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