The £100 Pain In The Neck

24th January 2012

There has been lots of interest in the offices regarding the recent government focus on car insurance fraud, “crash for cash” scandals, insuring numbers of uninsured drivers and the escalating number of personal injury claims. You may well be thinking that this has nothing to do with us law-abiding citizens. Think again!

If you are an insured motorist, this little lot could be adding considerably to the cost of your car insurance quotes as insurance providers have to foot the bill for fraud related claims. That means that they have to inflate premiums passing on these costs to Britain’s legal motorists.

Some of the statistics around these illegal or unfair activities are quite surprising and we would like to share some of them with you.

Let’s start with uninsured driving. Despite recent research from the Motor Insurance Bureau (MIB) that revealed a massive drop in the number of uninsured vehicles on UK roads (a half million drop in the last five years), we are still near the top of the Western European tables for numbers of uninsured drivers, with about 4% of the UK’s vehicles – a staggering 1.4 million cars, vans and bikes – being uninsured. Given that payouts to third parties in accidents caused by uninsured drivers are funded by insurance companies, this practice is estimated to add up to £500 million of costs each year. Put simply, that’s £30 on your car insurance premium!

Now let’s take a look at personal injury claims. You may have read about the increasing numbers of whiplash claims that are being recorded. The Association of British Insurers (ABI) estimated that in 2009 there were some 700,000 such claims – a 70% increase on the 2005 number despite the number of road accidents actually reducing over this period. Again, the UK tops the European tables and can proudly boast that we have the weakest necks in Europe! The ABI estimate that these claims add about £66 to the average annual car insurance quotes.

So that’s about £100 added to every legally insured UK driver’s car insurance premium each year.

Food for thought isn’t it?

24/01/2012 16:36:35 Mike

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