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Civil Litigation Section

Motor insurers benefit while access to justice is hit

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An undercover investigation by consumer organisation Which? has thrown the spotlight on motor insurers which increase driver premiums after minor collisions, even though policy holders are blameless.

Commenting on findings that the insurance industry reneged on a promise to reduce premiums after the government brought in reforms to reduce whiplash claims, a Law Society spokesperson said:

‘The findings by Which? raise questions that the insurance industry must answer about the cost of motor insurance premiums. The figures released by The Times show that government reforms targeted at reducing whiplash claims have led to personal injury claims arising from road traffic accidents falling by 23,000, saving insurers almost £520 million.

‘Seemingly, the government’s objective to reduce the cost of motor insurance by reducing the cost of personal injury claims has resulted in insurers making savings but not passing the savings onto consumers. We would expect savings to be passed on.

‘We are also concerned that if proposals to stop people from bringing claims who have suffered minor soft tissue injury, through no fault of their own following a road traffic accident, are taken forward this will further impact on access to justice. Also, the small claims limit may be raised to £5,000 for personal injury claims which will mean that many people won’t be able to get the legal advice they need to bring a claim that they are entitled to bring in law. Such proposals add insult to injury if costs savings made through reform are not being passed onto consumers.

‘It is a legal requirement for consumers to have motor insurance and, by law, motorists have to declare an incident if asked when renewing a policy, even if they failed to claim. The reality seems to be that motor insurance companies are benefiting while costs savings are not being passed onto ordinary people and we are calling upon the insurance industry to address this grave concern highlighted by Which?.’

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