Accident figures are falling – why not car insurance rates?

While drivers may be frustrated by the increased numbers of drink driving laws, speed bumps, and speed cameras, all of these things have contributed to falling accident figures – yet car insurance rates have continued to go up.

A Department of Transport report recently demonstrated that fatality and injury figures have undergone a decline in the year to September of 2011, with only 1,900 deaths and 24,000 serious injuries for the 12 months following October 2010, a drop of 4 per cent overall, while total casualties across every category only numbered 204,350, a drop of 5 per cent, and the number of injured or slain children also declined by 7 per cent.  Yet despite all these improvements, motor car insurance premium prices have continued to rise, leaving many scratching their heads as to why it has become more expensive to drive a car if the roads have gotten safer.

The issue, according to discount car insurance experts, is that while accident figures are down, claims figures have gone up – sometimes precipitously.  Those injured in car accidents that have gone on to make successful claims for damages from car insurance companies have raised costs for insurers, resulting in rates going up for motorists as their insurer tries to recover these costs in any way they can.

The insurance industry may have brought this fate upon themselves due to some practices that they have adopted, such as accepting cash payments from claims management firms and personal injury solicitors for the personal details of customers that were involved in accidents through no fault of their own.  These insurers accept these ‘referral fees’ in order to generate revenue, as the details of the customers they sell on are then used in claims against rival insurers, though their rivals are selling on information to these same management firms, leading to increased claims – and thus increased costs – against them as well.

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