While
we are completely aware about the ever rising motor insurance premiums
in the UK, we may have never dug deeper into the reasons or, have just
accepted that it is the whiplash or fraud claims that results in hikes
in the premium rates. Moreover, as good and honest drivers we have taken
the role of the victim and blame a few who have the habit of faking
motor accidents to get their claims approved.
Well, this can be just one side of the story and insurance holders
have probably never tried to see the other side. Although, people are
paying an average of 8% annual increase in car insurance premiums, which
equals to around £629, there seems an absence of investigating things
beyond what comes up front. However, the law firm Thompsons Solicitors
has brought forth some startling points which may uncover insurance
companies.
The law firm says that there have been no evidences from the motor
insurance industry about the fraud claims. It also claims that the
insurance industry talks about “fraud pandemic” but if we look at the
statistics of previous five years then claims payments has fallen by a
high margin. In fact, in the last five years payments for insurance
claims have decreased by 30%. It suggested that in 2010, the insurance
industry paid £8.3billion while the last year’s payments equalled to
£5.8bn.
Thompsons Solicitors raised a question on the reasons behind the 8%
increase in average premiums while the industry is paying much less to
the policy holders. Moreover, the shareholders are enjoying ‘huge
dividends’ which cannot be the case if the industry is losing out of
money.
The head of the firm Tom Jones pointed out that “In our view, fraud
is being cynically exaggerated to attack the rights of honest motorists
and to justify premium increases. It’s high time that the insurance
industry stopped their manufactured hysteria about fraud and
concentrated on providing greater transparency so consumers can see if
the ever-growing premiums are justified.”
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