Insurance Firms in the Spotlight Again For Bad Practice
by Jim Loxley - Legal Executive
24 October 2012, filed under Personal Injury
The so-called compensation culture in the UK has been an on-going addition to the breakfast newspaper and is a combination of facts and media hype. One genre of facts which periodically surface into the press (albeit a genre of facts which don't make quite the same sensationalist hype as a small handful of unscrupulous scapegoat bandit claims companies set up in the Midlands) involves major motor insurance companies increasingly in the highlighted as some of the primary culprits for both the claims problems and the rising insurance costs for drivers. All of the media faff surrounding this business originally stemmed from the fact that consumers were extremely (and, quite rightly) upset about the excessive 60% increases which have been routinely witnessed in motor insurance premiums over the past few years.
Recently, the Law Gazette published the results of a report carried out by the Office of Fair Trading (OFT), which mean referring the motor insurance company to the Competition Commission for it to carry out further investigation into what were quoted as ‘dysfunctional practices’. The OFT found that the motor insurance industry was charging drivers too much money to drivers after a car accident.
The insurance companies have become well-known for blaming everyone including lawyers, claims management companies, policy makers and drivers themselves not taking enough care rather than taking responsibility for the increase while they make tens of millions per year in referral fees. Desmond Hudson, a man who is a chief executive in the Law Society, pointed out this fact, stating in no uncertain terms that that the OFT clearly believes it is in fact the insurance companies which need to get themselves in order.
As usual, the Association of British Insurers (ABI) has stated that it welcomes the announcements and is looking forward to the Competition Commission bringing its changes to the market which he described as much needed.
Further comment was made by Clive Maxwell, chief executive at the OFT, who stated that it appears the motor insurance companies of the drivers who are at fault for car accidents had little control over the bills which they must pay. This is a situation which is likely to be leading to higher costs for those companies and, ultimately, higher insurance premiums for drivers on UK roads. He went on to state that there's no quick fix for these problems, a fact which has resulted in the Competition Commission stepping in to make a more thorough investigation.
Motorists all over the UK will have to wait in hope that the appropriate authorities get to the bottom of the situation before they can start to enjoy motor insurance premiums resembling normal levels once again and for the first time in many years. Either way, it looks as though the truth of the matter is really going to come to light over the next few months as to how and why the car insurance figures have been so high.
Jim Loxley is one of our regular writers. Find him on Google+ for more interesting legal news and personal injury opinions:
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