Industry news roundup: week ended 16 March 2015:
Just when you thought it was safe to go back in the water, that old chestnut of ‘compensation culture’ bankrupting insurers has gotten trotted out once more.
If there’s one thing that drives me absolutely barmy it’s listening to insurance providers whinge on and on about how they’re being victimised by everyone. Every once and a while when they don’t feel they’ve gotten enough attention as of late they’ll begin crying about how ‘compensation culture’ is ruining their injury, pointing to increased personal injury claims and greedy, ambulance chasing personal injury lawyers just draining their coffers dry.
The refrain began again this week, with big-time insurer Aviva saying that even though the number of road accidents has gone down by 30 per cent, personal injury claims are up by 62 per cent. Not only that but the insurer said that a full 96 per cent of road traffic accident claims were brought not directly by injured parties but by personal injury lawyers or claims management companies.
Now I need to interrupt right here. Do these insurers really believe they’re fooling anyone with the idea that people legitimately injured in car accidents should be representing themselves? What man or woman in their wildest flights of fancy would be able to sustain a personal injury case against a deep-pocketed insurer like Aviva, especially if the case involves the kinds of injuries that can leave you without the ability to work for weeks or even months?
In a case like that, there’s only one type of person you should be turning to if you’re injured, and it’s a personal injury solicitor. They’re not bloody ambulance chasers simply because they represent people who can’t represent themselevs; yes, they rely on no win no fee agreements to get paid, but that’s because the majority of their claimants don’t have any damned money because they’ve been unable to work for months and they’re just barely squeaking by on savings – or on the largesse of their family members.
Yes, I suppose that insurance fraud is a problem. I’m sure it always will be. But insurers like Aviva, who want to make it harder for the injured to bring lawsuits against them with the aid of a lawyer, are only protecting their own interests at the detriment of others.
As the Government considers changing the MOT test system from an annual one to once every two years, fears have begun to arise that doing so may lead to an increase in car accident claims.
According to the Government proposals regarding MOT tests, cars less than ten years old would only need to be tested every other year. However cars more than a decade old would persist in needing an annual test.
Brand new vehicles would also see a larger gap between MOT tests, up from three years to four. While already hard-pressed motorists would benefit from a potential cost savings, motoring groups have expressed fears that instituting the change could lead to a marked increase to RTAs.
A Government-commissioned study even seems to give credence to this concern, as the Transport Research Laboratory recently released figures that three per cent of road accident claims may be attributable in part to vehicle defects. Switching to an MOT test once every two years could result in fifty five more fatal accidents on UK roads every year, say concerned motoring organisations.
The proposed changes could also have a deleterious effect on the economy, fear garage owners. As the number of vehicles needing repairs decline, job losses may be an inevitability, garage owners caution.
Approximately 23 million tests are currently carried out every year at MOT testing centres across the country. For every hundred vehicles tested, an average of thirty five do not pass their MOT test, according to official figures.
Despite the figures from industry experts pointing to the changes having a negative effect, it is unknown at this time whether the Government will revise its plan to institute the changes to its MOT testing scheme.
One expert has categorised the government attack on the UK’s so-called personal injury compensation culture as a scam recently.
The government recently announced it has begun to formulate plans to ban personal injury lawyers from offering cash incentives to people in order to make accident claims after being involved in such an incident. David Cameron referred to the resultant rise of a compensation culture as a damaging force.
If people can separate themselves from any notion of personal responsibility then the number of personal injury lawyers poised to swoop in with an accident claim on even the slightest pretext must be curbed, the prime minister added.
However one industry expert has taken affront to Mr Cameron’s comments. Stating that the compensation culture is a myth fueled by the insurance industry, the expert stated that it was perpetrated to get companies and councils to take out more insurance cover.
Other than road accident claims there are less than every type of personal injury claim according to government statistics stated the expert. The only entities set to gain from fears of a compensation culture are therefore insurers. Insurance companies can feel free to raise their premiums as demand for insurance cover rises.
Industry experts do agree that the government’s plan to ban such adverts that claim to promise cash advances if legal firms take clients’ cases. However the governmental action has been criticised as diverting attention away from the more important issue of ensuring that those genuinely injured get the proper levels of compensation.
Experts caution against cutting access to justice by dressing it up as an attack against a nonexistent compensation culture. The only result in a reduction of access to justice will only increase the profits for insurance companies even further, they warn.
Motorists in Scotland are predicted to submit millions of pounds worth of accident claims as weather-ravaged roads lead to damage done to vehicles in the region.
The AA recently stated that local authorities across the UK paid out £50 million in traffic accident claims in 2010 due to roads defects alone. Insurance firms also faced more than £10 million in costs for damage brought about by potholes formed over the constant freezing and thawing during the winter months. Moreover in order to preserve their no-claims bonuses, tens of thousands of motorists across the UK are expected to pay up to £400 for repairing damage done to their vehicles from road accident claims.
Councils and other roads authorities are routinely held responsible for damage done to cars from broken kerbstones, raised ironwork, or potholes. However AA and other motoring organisations stated that securing a payout may be extremely difficult. These organsiations urge motorists to make nuisances of themselves to their local councils if they cannot at first get them to admit liability.
Unfortunately there are still several months ahead of us until the full extent of this winter’s freeze will become apparent on the roads network in the UK. However organisations are already predicting that the number of accident claims will exceed last year’s figures. 2010’s figures alone represented an increase of 100 per cent over the previous year’s tally in several areas.
One spokesman for the AA stated that potholes contributed to a large percentage of claims last year. In the wake of a second winter of evere weather a good number of the repairs carried out in 2010 have already re-0pened.
The AA stated that claims will be up in comparison to last year. The motoring organisation predicted that many motorists will choose instead to claim against a council than an insurer in an attempt to preserve no-claims bonuses through that insurer.
Motor accident claim road deaths over the past 12 months have decreased to under 2,000 for the first time, according to transport figures recently released by the Department for Transport.
Taking place from June 30th of this year to the same date in 2009, the reduction in the death rate from traffic accident claims has been a “tremendous” achievement, says Edmund King, president of AA.
Mr King stated that, in the year 2000, there were a grand total of 3,409 deaths from road accident claims. He added that the reduction of over nearly 1,000 deaths from their previous high of 2,946 to the current total of 1,990 since 2007 is quite an impressive feat. Mr King also stated that the recent reduction can be seen as a tribute to all the excellent work of those that have tried so hard to meet the 2010 targets the Government set at the turn of the last century.
Mr King concluded his statement by remarking that in order to galvanise road safety efforts for the next ten years and then some, the UK is in desperate need of a new target it can work toward meeting.
The only figure that worsened recently was a 1 per cent rise in deaths among cyclists; additionally the number of non-fatal casualties among cyclists also rose by 4 per cent as well.
Called a disturbing trend by industry experts, calls to action have ben made in order to ensure that both older cyclists who return to the road and younger cyclists begging to take to the road have the proper training available to them on how to be safer cyclists.
One particularly strong concern has been for those returning to their two-wheeler after a long absence. As these particular cyclists rely, often to their own detriment, on their childhood experience on a bicycle in addition to their experience as a motorist. Such experience simply does not equip a returning cyclist for riding on the roads of today.
In order to avoid resorting to making car accident claims on their insurance, nearly one out of every four motorists have instead paid out of pocket for any damage they may have caused in an accident, a new survey has discovered.
Approximately 25 per cent of people who have been the cause of an accident told the survey that instead of making a traffic accident claim on their car insurance, they instead paid the costs of the damage to the other driver’s car directly.
The most often cited reason motorists decided to pay out of pocket for any damage caused in road accident claims turned out to be a desire to ensure their insurance premiums did not increase. 11 per cent of respondents also stated that a desire to preserve their no claims bonus was the most important factor to their decision.
Slightly over one out of every five drivers additionally stated that it was simply not worthwhile to claim on their policy because the excess was too high on their insurance.
However 2 per cent of respondents stated that since they were not insured at the time they became involved in a car accident, they had no choice but to pay for any damage done themselves.
Even among those who actually did file a car accident claim, 42 per cent of them stated they were considering instead paying the other driver off in the event of another accident sometime in the future to ensure their premiums stayed the same.
Twenty per cent of drivers who were at fault during a traffic collision admitted to lying in order to make the other driver seem to be the responsible party. Additionally 4 per cent of respondents stated that they had pranged and run, whether or not the other vehicle was occupied at the time.
After having no choice but to issue a profit warning recently, the wheels may be falling off Helphire, an accident claim handling firm.
The company, based in Bath, has declared that both its full-year profits and its revenues will face significant losses. The announcement sent its shares into a tailspin, resulting in a closing figure of £21.50. The total loss was a 28 per cent drop.
The company mostly pointed to a combination of good weather and high petrol garage prices, which have led to fewer crashes being suffered by motorists.
Providing services for road accident claims, Helphire supplies so-called ‘blameless’ motorists involved in an accident with interim cars while it handles the repairs on any pranged autos. Helphire additionally offers legal help for preparing any personal injury claims that may have been incurred during the accident.
However this is not the first time the firm has been in hot water. At the height of the credit crisis two years ago, the company nearly shuttered as it reeled from the loss of its largest customer, Saga and AA owner Acromas.Saga.
Since that date, 1,200 employees have been made redundant, two instances of rescue fundraising efforts have been attempted, and two chief executive officers have come and gone as well.
Despite successes related to the firm’s efforts to undergo major overhauls earlier in the year, business has still been bleak for the traffic accident claim help provider. Recently company head Martin Ward stated that he had hopes that business would become more brisk, as the seasons turn to the winter, which traditionally has been a period of the year when crashes tend to happen more often. Pre-tax profits for the firm however are estimated to be approximately £13.9 million, which compares unfavorably to the £21 million predictions made by analysts.