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At Direct 2 Compensation, we’ve long been fighting the battle against common opinion that we and our fellow Personal Injury Claims professionals are the sole problem for the constant and ridiculous rising cost of insurance premiums. Of course, most people take the line given by the Insurance sector that their profits are not growing and that premiums are up because of the volume of claims. We know that this isn’t the case – premiums have gone up in line with increased profits.
Finally, today we are able to get provide some supportive evidence to back up our view of the situation.
Just today, the access to justice action group (AJAG) published evidence revealing and proving just how much the insurance industry itself inflates claims costs, particularly regarding the credit hire fees for the replacement vehicles they provide as a result of road accident claims. Andrew Dismore, AJAG Co-ordinator said:
“The insurance companies are always ready to blame others for the cost of car insurance, but this research shows they are part of the problem. Under the official Association of British Insurers’ (ABI) GTA rates, the cost to hire a medium sized family car for a week is set at £349. The average on the regular market to rent a similar car is £172 and the cheapest comparator would have cost £224 less than the ABI rate. Similar huge difference apply for all classes of credit hire, from small cars to white vans and prestige vehicles.
The law quite rightly says that if you have an accident that is the fault of another, you are entitled to have the damage to your car repaired, and while it is off the road, (or until written off) you are entitled to claim for the cost of a replacement. But under the ABI’s merry-go-round, the object is to beat the other insurer to the claimant, incited by the GTA agreement procedures, and to claim these exorbitant rates.
The solution is to end the ABI’s sweetheart deal with the credit hirers as to the charging rates. The primary obligation to provide a replacement vehicle should lie with the liability insurer. And there needs to be a set timetable for maximum default hiring periods and repairs at a fair cost”.
So there you have it, the costs involved in Road Traffic Accidents needed be as high as they are – and it’s not the Personal Injury Claims sector that is responsible for that element of cost. It’s simply the greed of our huge insurance companies cashing in – and then using their might, lobbying power and the media to dishonestly peddle the myth that the reason for premiums rising so far is purely down to the likes of us.
It’s interesting to see light being shed on the practices of the insurers. They seem to want us to feel sorry for them when they have to pay compensation to cover losses caused by their insured – but this is exactly what they charge fees for!