Public don’t trust insurers to pass on car insurance savings if small claims reforms go through

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77% of the public do not believe insurance companies will hand customers any savings made from proposed government reforms to personal injury claims, according to new research carried out on behalf of the Access to Justice (A2J) group.

The government is proposing that personal injury claims worth up to £5,000 will have to use the small claims court and that those bringing them cannot recoup the cost of any legal advice. It also wants to get rid of general damages for small value claims.

Insurers have said that the reforms will help them pass on savings to motor insurance policyholders, but You Gov, which carried out the research, has found that the public does not think that this will happen.

Only 11% of those polled said they trusted insurers to live up to their promise and reduce car insurance premiums if the reforms become law

You Gov has also discovered that 73% of people do not believe that insurers care about them, while 60% believe that they would be treated fairly by their own insurer if they had legal support. 23% of drivers are of the opinion that this would happen without legal help.

A2J spokesperson Andrew Twambley said: “A2J is campaigning to get rid of cold callers, stop out-of-date claims, and for fraudsters to be brought to justice through the courts with custodial sentences. The public don’t want their rights eroded to keep insurance company shareholders happy.”

Turning to the research, Twambley said: “The research proves that car insurers have a trust problem. The public do not trust insurers and they do not believe they will act in consumers’ interests if these reforms go through.”

He added: “However, nobody should be surprised. Insurers promised to reduce motor insurance premiums after the last set of government reforms, in 2012, but car insurance is more expensive now than at any time during the last four years.”

You Gov has also revealed that the public is sceptical about how non-fault customers injured in a car accident are treated by the other driver’s insurance company.

Asked whether the other driver’s insurance company would treat them fairly without legal help, 71% said no. Only 15% said they trusted the other driver’s insurer.

“Customers, especially those injured by another driver, are right to be sceptical. Insurers have no interest (because it costs them money) in helping non-fault injured people get back on their feet,” said Twambley.

The findings echo concerns from the powerful House of Commons Transport Select Committee which in a 2013 report opposed reforms to personal injury.

“The results send Ministers a strong message from the public that they don’t trust insurers either,” added Twambley. “Like the Select Committee, the public knows that if ministers remove the right of redress for injured people, insurers will not treat them fairly.”

Twambley said that in recent years, insurers’ balance sheets have been hammered by low investment returns, and this was the real reason why they were so keen for personal injury reform to go through Parliament.

“These reforms will mean they pay out less to customers in claims and instead maintain dividend payments to their shareholders. So shareholders will gain at the expense of ordinary people, who will lose their legal rights,” he said.

 

 

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk