Motorists to save £1bn collectively on car insurance?

Both the Government and car insurance companies have been working hard to ensure motorists that they’ll be saving cash on their premiums in the New Year.

The trick is, they say, in dismantling the rights of those making claims for minor whiplash injuries stemming from car accidents to claim for cash compensation. The plan was first floated in the Autumn Statement by Chancellor Osborne, with the Government saying that doing so could slash annual motor car insurance premiums by £50 across the board; insurers across the UK have been championing the decision, touting how the change could result in around £1 billion per annum could end up back in the pockets of British drivers.

Insurers have always whinged about how much revenue they lose through claims fraud – especially for hard-to-prove soft tissue injuries like whiplash. By the same token, the legal fees that insurance providers have to pay out is another sore spot, which is why the Government is proposing to ratchet the personal injury claims upper limit for small claims court by £4,000 to a new limit of £5,000. This should also reduce legal costs for insurers by a considerable margin, or at least that’s what insurers and the Government are saying. Whether or not that means it will result in reducing access to justice for those hurt in legitimate motor accidents is anyone’s guess I suppose.

At any rate, big-time British Insurers like LV= and Aviva are saying they won’t sit on the increased profits. Instead they’ve pledged to pass any savings as a result of these new changes in full to their policyholders. Now whether or not these insurers will honour their promises or in actuality they’ll just hoard their new-found revenue like a rather unpleasant dragon nestling in a heap of golden coins is of course completely unknown. However, if I’ve learned anything from dealing with big, nameless firms that would just as likely take the piss out of you than treat you like a human being, I’m not going to be holding my breath to see my premium price drop by 50 quid when I renew this coming year.

Does that sound petty and distrusting of me? Well for what it’s worth I don’t necessarily trust these insurers as far as I could throw them. That’s just me though – if you’re not as much of a curmudgeon as I am your mileage will vary of course.

 

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