The Association of British Insurers has recently stated that car insurance rates could decline if the government institutes its plans to change rules related to claims management company governance.
Justice Secretary Ken Clarke unveiled new plans in Parliament recently to overhaul Welsh and English no win no fee legal case regulations. The most notable proposed change would be to stop charging the defendants of such cases with lawyers’ success fees but have the claimant responsible for paying the charges instead, a move that could result in cheaper car insurance.
Car insurance companies have had to raise their premiums as a result of the UK’s so-called ‘compensation culture,’ stated the ABI. However Mr Clarke’s newly proposed changes could work to halt and reverse the phenomenon, the industry organisation added.
ABI general insurance and health director, Nick Starling, stated that the proposed reforms are a step in the right direction for claimants with genuine issues, as they all too often face struggles under the current system to get compensated fairly. Mr Starling also said that the ABI has been campaigning long and hard for reforms to the system in order to make it more cost-effective, faster, and simpler in order to aid the genuine claimant.
The ABI director added that motorists end up paying an additional 10 per cent on even discount car insurance due to the high costs associated with the settlement of personal injury claims. However if these reforms are instituted motorists can begun to look forward to future savings on their insurance premiums, he said.
Any such relief will indeed be welcome news to motorists, as they have faced increasing insurance costs throughout the past few months. Earlier in March research findings were released that indicated the price of the average car insurance premium were 31 per cent higher in 2011 than they were the previous year.