Are law firms to blame for spiralling motor insurance premiums?

30 May 2011

Bitterwallet-Len-Dastard-featuredHola, banditos! It is I, Len Dastard, former Mexican wrestler turned litigation executive. I'll shortly be donning my Cape of Fear™ heading to the coast for a Bank Holiday of Tequila, which will inevitably end in me knuckling some drunken estúpido in his los dientes, so he might chupar his desayuno through a paja for a la emana. Pardon my French.

I am preparing a guide to pursuing a claim for personal injury, having been asked by several avid readers for guidance on this topic. While preparing this guide, I read the following news item and would appreciate your thoughts and comments.

Simon Douglas, director of AA Insurance, has suggested that law firms are partly responsible for the sky high motor insurance premiums that many drivers nowadays face. The latest figures available state that collisions on the road fell by 6%. Good news? Sadly not. The number of road traffic injury claims rose by just over 13%.

According to the AA British Insurance Premium Index, the average cost of a comprehensive policy rose to £892 in the first quarter of 2011. That is roughly a whopping 40% more than the very same period in 2010.

Further facts indicate that 200 whiplash claims are made every day for accidents up to three years previously. You might remember the piece that I put together which briefly touched on the Limitation Act 1980 - you can find it here.

The AA said that they have received reports of solicitors promising payouts of at least £3,000 if car accident victims take legal action. In response to these claims a Law Society spokesman said that solicitors were highly regulated and prohibited from techniques such as cold calling and asked that insurers distinguish between solicitors and claim managers.

Who do you think is to blame for the rising cost of insurance? The personal injury lawyer? The person who caused the accident? The victim for pursuing their claim? The insurer? Let me know your thoughts in the comments below, and I will incorporate them into my upcoming guide to making a personal injury claim.


  • charitynjw
    Car accident=ambulance chasers=whiplash claim=big insurance payout=excuse for insurance companies to put premiums up!!
  • Despise
    I have to agree. Its the Personal Injury companys to blame. I get a call every other week on my personal mobile from them asking if i have been in a crash in the past 3 years that was not my fault bla bla bla. Plus its all advastzed on TV during the morning so these doll dossing scum can screw the hard worker even more.
  • andy y.
    Motor insurers fed up of making underwriting losses have decided to effectively stop competing. It isn't solictors responsible for big payouts its insurers settling before court as its cheaper.Consequently too many questionable claims get paid.
  • isaac h.
  • Andy
    Don't forget Autoglass and their constant radio adverts! The amount of money they keep extracting from insurance companies must be staggering. I really wish the ASA would clamp down on them using fear tactics to get people to fix chips in their windscreens that would never cause any problem.
  • charitynjw
    Maybe they're just doing it for the crack, Andy!
  • klingelton
    @andy Ok, it's not quite as terrible as they make out, but a chipped windscreen that can be fixed with their resin injection (and usually for free) is much cheaper than your insurance windscreen excess. Lord knows we'd rather spend £60 on beer and hookers. I speak from experience having ignored a crack for a good 6 months only to have it crack across 4 foot of my windscreen, money I could do without spending. That said - the stories are slightly sensationalised, but not the less plausible.
  • Gavin
    I'm Gavin, from Autoglass. I've got a really annoying accent.
  • TK
    Surely the problem is with the law which allows people with minor injurys to claim for substantial amounts of money? (I would class 3k as substantial as this would make a fairly large difference to my life). I would class myself as a fairly moral person, but in the case of a car accident that wasnt my fault I would put in a claim, because I know dam sure that someone else would do it to me and because it is almost like a rebate on the extortionate insurance that I have been paying for the last 8 years. If the law was changed so that there were more checks into actual injuries and limits put on payouts for what i would call minor complaints (1 week of a stiff neck is not worth 3k imo) then I think the personal injury lawyers would stop pushing so hard as they are making less money, which in turn would mean that less people would claim and then hopefully premiums would come down.
  • Injured s.
    TK: I was in a similar situation (my car was written off from being hit from behind) to the moral situation you were in and used a well known 'ambulance chaser' endorsed by Quentin Wilson I was given a course of physio privately (as was my gf who was a passenger, she has had to have more) and I have only just been referred by my gp for physio on the NHS for an accident 7 months ago, there is a strong bonus there for getting treatment I needed fast. For a low speed accident we both had (well still have to an extent) whiplash and still have it play up thanks to the slowness of getting the proper treatment on the NHS, the payout we are getting (just confirmed last week that they agreed it) will cover the previous course of physio (at £300 a course), another course and the time off work as a result. I think the main problem is the fact that solicitors are used at all and that not everyone is honest, both groups of solicitors have drawn out my claim as long as possible to ensure they get paid, which bumps up the total cost of the claim, and means both me, my girlfriend (as not at fault driver/passenger) and the girl that hit me will get higher premiums due to the total cost of the claim. I class myself as a moral person, had I not missed time off work, had my car written off and been (at the worst stage) on large amounts of codeine per day + high strength anti inflammatory meds and needing muscle relaxants making me unfit to drive (as well as being physically unfit to do even a desk job) and it was just my car written off I wouldn't have claimed, in fact I would have probably offered to not involve the insurance companies at all aside from notifying them of the accident given that my car wasn't worth a huge amount.
    You pay national insurance right??? So why pay extra insurance for driving your car???
  • burundi
    I work for a firm of solicitors and we have departments that cater for the insurance firms themselves and that cater for the individual. The issues are numerous and it is not entirely solicitors to blame, first and foremost are the claims management companies, they can sell referrals to solicitors for upwards of £300 a time, they will also provide services such as a loan car and storage of the damaged vehicle, both of which get charged at the maximum rates possible to the insurance company in the event of a successful claim. Secondly the charges made by the solicitors themselves are expensive, these charges are capped by the local courts but imo are still too high, the insurance defence dept hourly charges are approx a third less than the Personal Injury depts. If you are involved in an accident and your injury is worth £1500 on a no win no fee basis then the claimants costs will usually be twice your injury value, add to that the fees for in-house or contracted solicitors to defend the claim and a straightforward whiplash becomes a £5 to £6k layout for the insurers. A far more organised claimant industry that knows all the myriad ways that monies can be extracted from an insurance company is the largest factor in the rise of insurance premiums, there are certainly many dodgy practitioners out there and even more bent claims management companies. Andy of Yarm - you have no idea what you're talking about, the insurers, now more than ever, are scrutinising claims more closely for fraud, court is incredibly costly and most claims are, and always have been, settled before court is even thought about, it's only the very high value cases that usually get to court, the vast majority will never get there.
  • It’s p.
    [...] have gone mental, with typical annual increases of between 25% and 40%. While it is tempting to blame the insurance companies, who are out to make pots and pots of money after all, the UK head of a global insurance company [...]

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