posted 2 months ago

Drivers Want Compensation Culture Killed To Lower Insurance Costs

Aviva calls for government to reform insurance rules which could slash the typical cost of motor insurance by £43.

Aviva research results

UK motorists overwhelmingly want the government to honour its commitment to reform whiplash compensation laws to slash the cost of insurance, Aviva concluded. The insurer's research suggested that 80% support reforms highlighted by then Chancellor of the Exchequer, George Osborne, MP, in a November 2015 Autumn Statement.

The insurance company explained the potential benefit of such reforms. Firstly, motorists would no longer be financially compensated for minor, short term, injuries. This practise “would end”, it suggested. Further, lawyers would only focus on cases where their “expertise is needed” and such fees would be curtailed.

These reforms – if implemented as envisaged – would cut the “typical” cost of insurance by 10%/£43, Aviva argued. In contrast, the Association of British Insurers said that prices rose 10% in the last year. However, it is the “frequency and cost” of injury claims that threatens to push prices still higher, Aviva concluded.

State of the insurance industry

The insurance company's expertise and research provides further insight into the industry and the nation's mindset. Conclusions include:

  • since 2000, the number of road traffic accidents has fallen 40%, but the number of personal injury claims has risen 89%;
  • easy access to compensation has facilitated a rise of crash for cash frauds where perpetrators deliberately cause collisions that “put innocent motorists at risk of real harm”;
  • 85% of the populous believes Britain has a “compensation culture”;
  • 88% of the populous believes “too many” people perceive compensation as a fast means to make money;
  • 88% of the populous believes the compensation culture encourages “exaggerated and fraudulent claims”;
  • 85% of the populous believes lawyers are “paid too much”.

Time for government action

Maurice Tulloch is CEO of Aviva UK & Ireland General Insurance. He argued: “The British public is sick and tired of the toxic compensation culture that has increased premiums, fraud and nuisance calls.”

“The Government has an historic opportunity to make a significant change that will cut the cost of motor insurance - and it is clear that the British public is fully behind the reforms.”

“It’s time to stop the nuisance calls, stop crash for cash, stop spiralling claims that push up premiums, and stop the profiteering at the injured party’s expense. It’s time to end this compensation merry-go-round and cut the cost of motor insurance for us all.”

He added: “We know that our customers are keen to benefit from the savings offered by these reforms.”