Not long ago, the AA revealed that in the uk, insurance premiums increased by a record 40 per cent, year-on-year. This prompted the Department of Transport to hold a ‘short enquiry’ about this issue.
While the outcome of this has yet to emerge, it isn’t difficult to detect what has gone awry. Millions of uninsured drivers’ being in accidents, bogus personal injury claims and the ‘cash for claims’ culture translate to two unwelcome scenarios. At best, every responsible driver is paying more for car insurance. At worst, some such drivers simply cannot insure themselves.
Britain’s 1.7 million uninsured drivers (the figure is the Motor Insurers’ Bureau’s estimate) add £30 to the insurance premium of each and every driver. More worryingly, uninsured and untraced drivers kill about 160 people every year, and injure 23,000 others. Currently, a life lost or a serious injury costs the uninsured driver a £200 fine and six penalty points on their driving licence. True, the driver’s car is liable to be taken away but he or she can always buy another unsafe old banger and go on his or her merry – and essentially lethal – way. The cost to the injured, or late, party isn’t specified.
Spurious injury claims, essentially for whiplash injuries are also costly. The Association of British Insurers’ report ‘Tackling Whiplash’ reveals that 20 per cent of your yearly insurance premium is spent on whiplash claims, an average of £66 per policy. The report found that in most cases whiplash symptoms last only for a few days, with occasional twinges lasting for a few months. This is understandable in a genuine claim but the plethora of no-win, no-fee lawyers is aware that insurers find it cheaper to simply pay out, rather than engage in pricey court proceedings. Interestingly, a survey by Moneysupermarket.com indicated that 5 per cent of drivers under 35 had arranged an ‘accident’ to make a fraudulent insurance claim.
That this is a clear case for legislation is more than obvious. It’s equally obvious that tackling this issue is one entirely practical cut that the coalition government could make.
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