The great £750 million insurance rip off
31 July, 2017
A recent investigation by The Telegraph has found that insurers are charging “not at fault” drivers up to 100 per cent more for labour rates than the repair costs should actually be. This provides the insurance companies with extra money to line their pockets, to the tune of £750 million per year according to The Telegraph. This means that drivers are paying an average of £22 extra per policy per year, which works out at about 5% of each driver’s annual insurance premiums.
Further to The Telegraph investigation financial reports for UK Assistance Accident Repair Centres Limited which trade under the name DLG Auto Services show that over the last two years they have generated over £285m in revenue from vehicle repairs and paid out over £50m in dividends to their parent company – Direct Line Insurance Group Plc.
In the past 12 months, insurers have led calls for further personal injury reforms to reduce the “cost” of whiplash claims to the average motorist. They say that false whiplash claims are costing innocent motorists, and the introduction of reforms will reduce premiums. However, this investigation by The Telegraph demonstrates that we cannot trust the word of insurers as they try and milk the system for as much cash as they can. This false belief that whiplash reforms will reduce the cost of insurance, only serves to punish consumers with genuine claims who will no longer be able to afford access to justice.
The reforms propose introducing a new tariff system which could see innocent victims of road traffic accidents receive as little as £225 in compensation. This investigation proves that these proposed reforms are not only unfair to innocent motorists, but they are also unnecessary. Instead, insurers’ unscrupulous activities need to be investigated. The greedy fat-cat insurers are lining their pockets, whilst blaming innocent motorists for the rise in premiums. In addition, recent research has found that whiplash claims are falling, yet premiums continue to rise. How can we trust these people to be honourable to their word that insurance premiums will be cut with the introduction of yet more whiplash reforms?
This is why First4Lawyers believe there should be a branch and root review into the practices of insurers before any new reforms are considered. If the insurers want to cut costs for innocent motorists, maybe they should look a bit closer to home.