Commenting on HM Treasury’s report on the effect of the 2018 Civil Liability Act on consumers, Matthew Maxwell Scott, Executive Director of the Association of Consumer Support Organisations (ACSO), said:
“Consumers surely deserved better than this wafer-thin report from HM Treasury, which feels like the financial services industry is marking its own homework and somehow still failing the test.
“What’s more, consumers were promised much more. Savings per premium were meant to be £35 per year, and yet have been only £31 over three years, that’s £74 per motorist that has failed to materialise.
“Since the Civil Liability Act was passed, motor injury claims have fallen by half and average premiums have increased by nearly three quarters. You don’t need to be a cynic to ask whether this whole exercise was simply a stretched-out stitch-up between HM Treasury and the insurers, most of whom made huge profits last year.
“Insurer demands for further personal injury reforms must now be seen for what they are, which is an attempt to bolster shareholder returns at the expense of injured people. Per-premium savings were almost the entire point of the reforms, and yet the insurance industry, having lobbied the government to cave in to its demands, has failed to keep up its side of the bargain.
“Given the failure of the reforms, it is a shocking mistake from the government to let its Motor Insurance Taskforce die on the vine. It needs to be reconvened immediately and serious questions asked as to why insurers are letting people down with impunity. The case for a full CMA investigation has never been stronger.”
IN OTHER NEWS, BBC HIGHLIGHTS CREDIT HIRE COSTS
Ina separate issue, the BBC has today highlighted the soaring costs of some credit hire costs and a Judge has criticised specific examples involving hire vehicle costs of over £50,000.
The Judge’s remarks are quite stinging, here’s an extract;
“What might come as a shock to the general public is how the Credit Hire Industry operates.
“In particular, some may consider the sums of money that motor insurers of culpable policyholders become liable for to be staggering.
“In an age where motor insurance premiums are reported to have risen to unprecedented levels, some may find it surprising that there appears to be no real appetite in the insurance industry to campaign for reform, presumably by Parliament, to control the level of credit hire charges compared to the ordinary market basic hire rate.”
The interesting nugget of information buried in the BBC story is that one case involved an NHS vehicle fleet and specific instructions from the insurers;
“She was simply following instructions she was given having been introduced into the process by the fleet claim arm of her NHS employers.”
It is often the case that not having a car, especially when it is part of your working day, is a huge problem. But for those who are working from home, or live in a two car household, the option of NOT having hire vehicles as an integral part of a Fully Comp policy should be there. In fact, it might well reduce premiums by a significant amount if NOT having car hire was the default position on TPF&T and Comp cover, so that hire cars are an optional extra.
That way the costs of that credit hire feature can be set against the overall revenues generated by drivers ticking that optional box and insurers can then fully cost their motor book in greater detail.
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net
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