As car insurance rates continue to rise year-on-year in the UK, many consumers turn an accusatory finger to greedy car insurance companies – but the truth is these insurers aren’t even turning a profit.
According to new first quarter results for the discount car insurance industry, comprehensive insurance policy prices rose by nearly 6 per cent. Meanwhile, third party fire and theft cover increased by more than 10.5 per cent over the same period, according to the AA.
UK insurers aren’t raising rates in order to pad their profit margin, however. According to one industry expert, car insurance companies have been persistently making losses despite the sharp rate hikes – and the blame lies solely upon dishonest drivers perpetrating insurance fraud and ambulance-chasing legal professionals encouraging frivolous claims.
The number of accidents occurring in the UK have actually been on the decline. However, due to the no-win-no-fee ‘compensation culture’ that has supposedly become so prevalent in Britain, the number of claims has increased substantially.
This sorry state of affairs is driven by solicitor firms that trawl for new accident clients wherever they can find them. Oftentimes they will send out unsolicited text messages en masse offering prospective clients the potential to be awarded accident compensation in the thousands of pounds.
These texts plague UK motorists regardless of whether or not they’ve been involved in a road traffic accident. Still these claims management companies and solicitor firms soldier on, generating huge costs for insurers that are then passed on to honest drivers.
Experts add that for those UK consumers looking for ways to reduce their cover that there are many different strategies they can adopt. One method is to purchase a car that is just naturally less expensive to insure.