Access to Justice (A2J) has called for the Government to take further action on automatic car insurance renewals which it says is “a scandal” that is costing six million motor insurance customers who renew automatically over £700m each year.
Andrew Twambley, a spokesperson for the campaign group, said that the average premium had increased by nearly 20% during the last 12 months according to research from Confused.com, driven by falling insurer investment returns and continuing losses on insurers’ motor books.
He said that this meant that it was even more unlikely that insurers would hand back to customers the £50 savings per policy the Government has estimated that it would accrue from reforms to the personal injury market.
Government plans to raise the small claims limit for personal injury to £5,000 and remove the right to general damages for soft tissue injuries, were also the very antithesis of One Nation government, said Twambley, as they benefit insurers at the expense of ordinary people.
A2J is urging the Government to “get it priorities right” and realise that insurers were failing to put their own house in order, and were lobbying Ministers to remove the rights of ordinary people to obtain redress for injuries suffered in accidents where it wasn’t their fault.
“The new Prime Minister and Cabinet have a good opportunity to review the previous administration’s legislative agenda and re-state some priorities,” said Twambley.
“As long ago as 2013, insurer activity at policy renewal stage was troubling enough to force the Treasury Select Committee to write to the FCA and ABI, yet car insurance premiums have now risen to their highest level since 2011.”
“The government is naive or deluded if it believes customers are going to get £50 knocked off their insurance premiums if these reforms go through.
“To date, only Aviva and LV= have publicly committed to doing so, in the official government press release. There has been a deafening silence from most of the car insurance industry.”
He added that car insurance was the only industry where customer loyalty was rewarded by an increase in annual premiums, as opposed to a reduction.
“Auto-renewal is a scandal that is crying out for government intervention.
“Instead, ministers have ducked the issue, choosing instead to ‘listen to the mighty’ and sweep away the rights of millions of people to seek redress for soft tissue injuries caused by an accident that wasn’t their fault, at the same time holding out a very uncertain promise of £50 off the cost of premiums.”