Weasel Words from the ‘Wronged’ as car insurers try to shift blame for inflated premiums

Weasel Words from the 'Wronged' as car insurers try to shift blame for inflated premiums

A weasel.

Finally, we hope, insurance companies are to face the government’s competition watchdog over their oft-quoted claims that inflated motor premiums have nothing whatsoever to do with their business practices.

Really? Do they think we are THAT stupid?

At last a government department has blown their cover and published what everyone, barring Jack Straw and chums, knows to be true:

Insurance companies ARE taking advantage of the system to inflate premiums for drivers by £225m a year, the Office of Fair Trading (OFT) reports today.

The competition watchdog says that after a road traffic accident, insurers of the not-at-fault driver and others, such as brokers, credit hire organisations and repairers, exploit a lack of control in the current system. They charge referral fees for using expensive hire organisations and then add to the cost by replacing the car for longer than is necessary.

The OFT has provisionally decided to refer the private motor insurance market to the Competition Commission after finding evidence that firms are competing in a ‘dysfunctional way’.

The report states that the government has focused its attention on reducing the cost of personal injury claims, but without intervention in the cost of replacement vehicles and repairs, artificially-inflated premiums are ‘likely to persist’.

Exactly. Three cheers and due credit for a chink of light in a tunnel of darkness and despond…

John Fingleton, chief executive of the OFT, said:

‘Competition in this market does not appear to work well for drivers. We believe the focus that insurers have on gaining the competitive edge through raising their rivals’ costs means that drivers pay more than they need to for their motor insurance policies.

‘Because insurers are distracted from competing primarily on the quality and value of service provided to insured drivers, incentives for greater efficiency may be reduced.’

Donna Scully, chairman of the Motor Accident Solicitors’ Society (MASS), said the scale of the problem could be ‘immense’ once it is fully investigated.

‘Money is clearly being made from consumers behind their backs and MASS would welcome full disclosure of specific fee income on every case so that the consumer is fully informed,’ she said.

It is no wonder the whole sector has fallen into disrepute and that consumers are so wary of everyone who operates in it, and frustrated by exploitative practices they are likely to encounter when they make a claim.’

The Association of British Insurers welcomed the report – hmm, doubt that – but declined to address the accusations over its members receiving referral fees from credit hire companies.

Now THAT we believe…

Nick Starling, director general of the ABI, said: ‘For too long insurers have faced inflated rates for credit hire cars and excessive hire periods which have led to higher insurance premiums for customers.

AND THERE WE HAVE IT.

WEASEL WORDS FROM THE ‘WRONGED’.  

INCREDIBLE AS IT MAY SEEM, AFTER YEARS OF VILIFYING ROAD TRAFFIC ACCIDENT VICTIMS AND PERSONAL INJURY SOLICITORS, THE INSURERS ARE NOW SEEKING TO BLAME THE CREDIT HIRE AGENCIES AND VEHICLE REPAIR COMPANIES FOR THE RISE IN PREMIUMS.

Soon there will be nobody else left to blame and what then Nick?

Karl Tonks, president of the Association of Persosanl Injury Lawyers (APIL) commented:

‘For years the insurance industry has sought to blame anyone and anything but itself and its own sharp practices for high insurance premiums. Legal costs for compensation claims were slashed two years ago for this very reason, but premiums remained sky high.’

The OFT expects to reach a final decision by October 2012.

In our opinion it can’t come soon enough.

Outrageous claims by insurers go unchallenged by supine MoJ

Outrageous claims by insurers go unchallenged by supine MoJ

The most outrageous claims pertaining to the debate on whiplash injuries are those being made by the insurance industry and government ministers seemingly hell-bent on creating a benign regulatory environment for businesses coupled with a full-frontal assault on the mythical compensation culture.

We say mythical because the two major studies carried out by this administration to examine the so-called compensation culture have both concluded that that the very notion of a compensation culture in the UK was misguided, erroneous and intrinsically flawed. 

Lord Young of Graffam’s ‘Common Sense, Common Safety’ and Professor Ragnar Lofstedt’s aptly named ‘Reclaiming health and safety’, independently concluded that the problem was more a figment of the media’s imagination and there was no evidence to suggest otherwise. Professor Lofstedt went so far as to publicly declare he was very uneasy and dismayed that his report was being misused to prop up government policy on health and safety in the UK.  

However, rather than let the independently researched facts get in the way of a good populist crusade, Prime Minister David Cameron has vowed to take on the ‘compensation culture.’       

Echoing the PM’s call to arms against accident victims seeking justice, none have risen to the challenge more enthusiastically than the nation’s insurance companies who have been invited to Number 10 twice already this year (most recently on 2nd May) to discuss how the government can help them reduce their costs and increase their profits. Incidentally, the government refused a request from The Law Society to be represented at these meetings and we can only wonder why…

Take a bow gentlemen and ladies of the insurance lobby for verily your occupation of the moral high ground on the matter of car insurance premiums is truly mind-boggling.   

For example, Head of Motor and Liability at the Association of British Insurers (ABI) James Dalton commented recently that:

‘If whiplash were an olympic sport, the UK would be gold medallists. The fact that whiplash is virtually impossible to disprove means that for too many it has become the fraud of choice, often aided and abetted by ambulance-chasing lawyers and claims management firms.’ 

Nick Starling,ABI Director General welcomed the PM’s intervention and claimed that:

‘Insurers are being swamped with exaggerated or even fraudulent claims. There is no medical diagnosis for whiplash and if an insurance company wants to challenge a whiplash claim it has to effectively say someone is lying to them.’ 

Well my goodness me. Imagine a world where an insurance company pays out on an insurance claim because it doesn’t want to upset the claimant. It might happen someday…you think?

Is Nick Starling actually saying that the insurance companies are simply paying up on whiplash claims? If so what does this tell us about:

a) the current profit margins in the insurance industry if it can afford to cough up on the simple ‘say so’ of the claimant.

b) the level of sheer unadulterated laziness and lack of attention to proper procedure in the insurance industry if it allows fraudulent claims to go unchallenged.

IF NICK STARLING KNOWS THE CLAIMS ARE FRAUDULENT WHY ON EARTH ARE THE INSURANCE COMPANIES PAYING OUT?   

It’s our money THEY are wasting!

Not to be outdone in the ‘heaping opprobium on the heads of accident victims and their families stakes’, government ministers have been lining up to place a well-aimed boot in the soft tissue of Access to Justice in the UK. 

Justice Secretary Ken Clarke has stated that :

‘It is scandalous that we have a system where it is cheaper for insurers to settle a spurious whiplash claim out of court than defend it, creating rocketing insurance premiums for honest drivers.’

Dear Ken,

Ask the ABI why it settles spurious claims.While you’re at it, why not ask how the insurance companies know which claims are spurious.

Last year, it was disclosed that Justice Minister Johnathan Djanogly’s two children each held shares in the claims management companies Going Legal and Legal Link Introductory Services, which solicit people who might have a compensation claim and then sell their details to lawyers.

Mr Djanogly had admitted that his brother-in-law, Ben Silk, owned the companies, but had not disclosed his children’s shareholdings.

Dear Johnathan,

Why are you still driving changes that will disadvantage the British public whilst benefitting your family? 

Last week Mr. Djanogly admitted the government would promote ‘Before The Event’ (BTE) insurance as a way of funding legal expenses and predicted the cost of such cover would come down.

Labour says annual premiums could be £150, amounting to a tax on justice that would reap big profits for the insurance industry. An internal industry analysis shows insurers stand to gain £1 in profits for every £2 of premium payments.

 

Our concerns:

We now have a situation in this country that the government of the day refuses to pay heed to the findings of its own reports on health and safety and chooses to listen exclusively to the jaundiced views of the vested interest that is the insurance industry.

Genuine accident victims are being actively discouraged from making compensation claims by concerted and ill-founded media coverage coupled with government action on Legal Aid and access to justice.

Hurt and injured people are being bullied by well-funded and powerful insurance companies to accept low offers before they have had a chance to seek independent legal and medical advice in the erroneous belief that they will be out of pocket if they lose their case.

The public are being spoon fed a diet of misinformation about the impact of the so-called ‘compensation culture’ by the government and the insurance lobby.

The government is determined to reduce the ‘legislative burden’ on industry by reducing the scope of existing health and safety regulations.

The government wants us to buy MORE INSURANCE to fund potential claims.

The insurance industry wants to kill off ‘no win no fee’ legal firms because they help claimants fight for justice and fair compensation.

Insurance companies would prefer to see no claims – EVER, but given that some claims must get through their net, they would like to decide on the level of compensation themselves and pay whatever sum they see  fit. 

So, don’t get injured.

If you do get injured get independent legal advice – while you can.

 

…and remember insurance companies , like bookies, never lose.