Drivers have been encouraged to make injury claims by their insurers, according to a new report recently published by the Treasury Select Committee.
The TSC report states that people who are persuaded to make car accident claims after their names are passed on by insurers to personal injury lawyers are inadvertently enabling their insurance companies to collect referral fees from their lawyers. The research efforts of the TSC were initially launched in order to identify the biggest factors that are driving the increase of car insurance prices in the UK.
The TSC additionally called for the establishment of an insurer-funded specialist police department in order to better handle the number of fraudulent traffic accident claims. The committee also lit into the insurance industry in general for neglecting to work harder to prevent staged and fake car accidents.
A motor insurance company representative from the Association of British Insurers has been dismissive of the committee’s accusations however. The ABI states that a better tactic would be to ban commission fees altogether, calling them a symptom of a compensation system that has grown dysfunctional. The ABI claimed that the blame for the issue needs to be laid at the feet of claims management firms, not its own.
Calling the report a ‘missed opportunity,’ ABI general insurance and health director, Nick Starling, stated that the committee has chosen to ignore the vast majority of the evidence it gathered prior to the publication of its report. Mr Starling further commented that the TSC neglected to recognise that spiralling legal costs and personal injury claims are the main causes of the recent car insurance rate hikes.
The ABI also commented that it is already working to reduce the levels of insurance fraud in the UK, as they are already funding the Insurance Fraud Bureau.