Newly revealed research has revealed that car insurance companies aren’t exactly passing on the savings when it comes to their customers.
File this one under the heading “I could have told you that”: Thompsons Solicitors says that while payouts for insurance claims have been plummeting since 2010, yet premium prices for motor car insurance have not been keeping track with this figure. As a result, the law firm says that insurance companies have had a net gain of something like £7 billion during that time.
For what it’s worth, that’s a lot of dosh – and if it’s true, we’ve got a lot to be cross about when it comes to the money we’ve all been paying to these insurers for the privilege of keeping our cars. Meanwhile, the industry hasn’t been resting on its laurels once the law firm made its accusation – in fact, the Association of British Insurers has sought to turn the tables, saying that this is nothing but an attempt on the part of claims solicitors to lobby the Government for a more advantageous legislative landscape.
Truth be told, the Government does plan to make it harder for those injured in whiplash claims to seek cash compensation. Additionally, there’s a plan to hike the upper limit to £5,000 when it comes to personal injury cases that can be brought in small claims court – something that would undercut personal injury lawyers from representing people injured in car accidents as well.
According to the law firm’s data, it’s true that on average the typical car insurance policy cost less in 2014 than it did in 2010. However, the last five years has seen car insurance companies jacked premiums up to the tune of an extra £353 million – even as these same insurance companies held onto an additional £7 billion by cutting the amount of money they spent on paying claims.
The ABI refutes these figures, pointing to its own statistics that say there hasn’t been an underwriting profit in the car insurance industry for more than two decades. Motorists have seen savings in excess of £1 billion passed on to them, the association added, thanks to the Government clampdown on ambulance-chasing lawyers looking to bilk the insurance industry out of every last penny it can.
So who’s telling the truth? Are we getting the wool pulled over our eyes by the entire insurance industry? Or are we being played like a fiddle by claims lawyers looking to pad their own pockets? Something makes me think that the truth lies somewhere in the middle – but who knows if we’ll ever know the truth of the matter?