Reform the Car Insurance Industry

car-accident

Most recently there have been a number of issues surrounding car insurance and car insurance companies. With the total amount it would cost the average person to insure their car on the increase due to fake claims many have asked for a complete reform of the car industry.

With whiplash claims increasing by 25% in just six years and over 30,000 staged collisions which cost on average £17,000 each is it any wonder the premiums are going up when it is costing insurers about £350 million per year.

However, many car insurers are actually making money by selling details of their customers to personal injury lawyers. Jack Straw, Former Justice Secretary is calling for a reform of the motor insurance industry.

Personal details of customers have been passed onto personal injury lawyers without any permission ever being granted. What is worst is that insurance companies are actually getting paid for these referrals. It is a vicious circle, the more claims made the higher premiums will soar and then the more referrals made will result in more claims.

Jack Straw, Labour MP for Blackburn has said that he is acting for those who are now concerned about the rising premiums. He wants the government to implement restrictions which will stop insurance companies from providing personal injury lawyers with customer details.

It was two executives from two of the leading insurers who let the secret slip saying that if they didn’t do it then it would only be a matter of time before another insurance company was doing it.

Furthermore legal firms who handle claims have said to have been ruthless, ringing victims up, bombarding them with calls and texts pressurising them into making a claim after an accident.

The Association of British Insurers’ Director General Insurance and Health has said that this move by Jack Straw has signalled a universal call for referral fees to be banned. Justice Secretary Ken Clarke has been asked to take action as the current system is in dire need of reform.

29th June 2011, 9:27