According to a recently released report, drivers in the UK are paying an eye watering £2.4 million on a daily basis to car insurance companies in order to foot the legal bills generated by whiplash and personal injury accident claims.
Motor car insurance providers end up paying £876 million every year to lawyers in the form of legal fees to settle road traffic accident claims, according to the Association of British Insurers. The ABI’s survey results indicate that car insurance rates go up by a collective £1,666 every minute as insurers seek to recover their legal costs from their customer base.
Once spread out among all the drivers in the UK, the court costs add almost £30 per year to every motorist’s annual policy, according to the ABI’s calculations. With the average premium price now standing at £418, this £30 a year represents an 18 per cent increase year-on-year.
These legal fees, which the ABI called ‘exorbitant,’ must be cut, as the insurance industry body referred to them as unacceptable, unsustainable, and unaffordable. However, insurance providers say that claims management companies and ‘ambulance chasing’ law firms do not bear the blame alone for massive legal fees.
The motor and liability insurance head for the ABI, James Dalton, said that since the introduction of the fast-track process for the settlement of personal injury claims with lower values in 2010, compensation payouts have been made much more swiftly than before. However, the fixed expenses that accompany the process are still too costly, Mr Dalton added.