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.”
This alarming revelation by Thompsons Solicitors is an eye opener and suggests that we need to see the other side of story as well.
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