Car insurance rates set to increase by 30pc in 2011

According to one discount car insurance expert, motorists already hard-pressed to keep their car on the road may encounter an increase of car insurance rates in the UK by as much as 30 per cent by the end of 2011.

Car insurance companies lay the blame on the rising costs at the feet of the increase in number of traffic accident claims that are brought by ambulance-chasing lawyers.  These ‘no win, no fee” lawyers encourage claims and have been instrumental in the creation of a £2 billion shortfall, said Drivers’ Alliance spokesman Peter Roberts.

Only interested in making  some quick cash, the members of the legal profession involved in this behaviour need to be reined in, Mr Roberts said. As motorists already face some of the highest petrol prices to date, the last thing the motoring public needs is to have to face increased premiums at the hands of greedy lawyers, he added.

The AA’s Ian Crowder also remarked that, while people who are involved in accidents should be compensated properly, claims companies have been drumming up business from amongst the ranks of those whose injuries are simply not severe enough to warrant any compensation.  A number of claims are being over-exaggerated, Mr Crowder explained, and the marketing strategy of these no win, no fee firms has been an aggressive one.

All of us are living in difficult economic times, said Mr Crowder.  This has made these claims quite tempting, he added, as motor accident claims often net quite large payouts that seem to grow with every passing day.

Mr Crowder also said that car insurance companies have a difficult time in combating fraud.  The AA has begun to investigate many of these claims for fraud, yet the cost of simply paying out against these claims is typically less than the cost to pursue a car insurance fraud case.

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