Guest post by Deborah Evans, chief executive of the Association of Personal Injury Lawyers
As the Association of British Insurers (ABI) supplies a list of excuses akin to ‘the dog ate my homework’ to pass the buck for rising insurance premiums to everybody but insurers, it’s time for a robust examination of the facts.
Repair costs are indeed rising prohibitively. The ABI talks of repair costs rising by 32% over three years due to modern cars being more expensive to fix. Let’s not forget, however, the ongoing scandal of repair costs being over-inflated between insurers. Whilst they all try to score a point against each other, every motorist pays through their premium.
Mud is slung at the cost of whiplash claims, with the ABI saying that the cost of claims has gone up by 2.3% year on year. Like repair costs, this figure is also over inflated – in reality, the cost of claims has fallen by 2.8%. So whiplash claims are not the cause.
I can’t help but feel that blame is being apportioned to whiplash claims because the ABI is pushing for swingeing reforms and it suits their agenda.
And what of the over-inflated discount rate? For years insurers have benefited from money that rightly belongs to the most seriously injured – those whose injuries are so catastrophic that they will need lifetime care.
Insurers have been able to keep a portion of this compensation as it is discounted to take account of the bank interest the injured person will earn when they invest the money awarded to fund lifetime care. The government is about to reset the discount rate – hopefully to reflect more fairly the low levels of interest that can be earned in the current economy.
The ABI would prefer the discount rate to continue to be over-inflated to under-compensate the most seriously injured people moving forwards, presumably not caring a jot if they run out of money to pay for their care towards the end of their lives.
One thing is for sure – it is a false premise to argue that taking money off injured people will lead to lower insurance premiums. Far-reaching reforms implemented in 2013 through LASPO, which wiped millions off the cost of claims, have had no long-term impact on the cost of premiums.
So what else could be done? Normally, cost-cutting initiatives start within an industry – looking at its own practices and procedures, introducing efficiencies and better practice, within an environment of continuous improvement. So stop making excuses and sort yourselves out.
APIL fights to ensure injured people are as powerful as the insurers they are up against when pursuing a claim. How we fear for the future of injured people should they end up in the small claims court as proposed in current reforms – battling forlornly against these insurers without the assistance of a lawyer.
If insurers continue with this vitriolic attitude towards the injured person, seeing them as leeches on the public purse rather than unfortunate victims of accidents, how can they be trusted to behave?