Car Insurance Premiums Could Be Falling Soon
The legal system in Britain currently means that all personal injury claims have to go through the courts individually. Many personal injury claims crawl through the courts at a snails pace. The result is lengthy and expensive court costs, and for every 1 that is given in compensation, it has been estimated that the legal profession gets 40p. These costs have risen at such an exponential rate that the British legal profession gets around 2 billion a year just from playing its part in personal injury claim court cases.
These costs have to be covered by the insurance companies, and such is the cost to them that it is estimated that 200 of the average yearly car insurance premiums is to cover these legal costs.
It is because of this that the Association of British Insurers is proposing that personal injury claims should be taken from the courts, and instead into an independent arbitration system. This would set compensation payouts for different types of injuries, and would follow on from a similar system started in Ireland in 2004. There, legal costs resulting from personal injury claims have been decreased by 75%.
At the moment, personal injury claims go to court and are considered individually. If the arbitrator proposed by the ABI is set up, reference payments for each type of injury would make a huge difference to the time and effort involved in a court case. Using the Irish system as an example, a back injury that recovers within a year is allocated the equivalent of 11,000 and a neck whiplash injury, also recovering within a year, would receive a compensation payout of the equivalent of 9,400.
Ian Crowder from the AA has pointed out that the new proposals will take the lawyers out of the loop altogether, resulting in a massive cut in costs. He added: Theres no doubt that the soaring costs of personal injury claims has been a significant contributor to insurance premium inflation. If they could be brought under control, premiums could be cut, something that would be welcome by all parties.
Well actually, theres one party that wouldnt be so pleased: the British Association of Personal Injury Lawyers. They have already lodged their objections, based on their belief that the injured would lose their right to an individual hearing and payout based on the particulars of the case. They referred to research they carried out which showed the initial offers by the insurers to be around 50% of the final compensation agreed. They also pointed out that 66% of defendants at first denied liability, which is what led to a court case in the first place.
The legal professions objections have not been found to be a problem in the case of the Irish experience since arbitration was introduced. Compensation values in Ireland are still at similar levels to payouts following court cases, with the added bonus of receiving the payout up to 3 times more quickly, and with legal costs slashed significantly to a quarter of the previous cost.
It could be an exciting time we have seen car insurance premiums rise and rise over recent years, its about time we saw a fall.
About The Author
Michael Challiner writes for Brokers Online ( http://www.life-assurance-bureau.co.uk ) who offer life insurance and car insurance ( http://www.life-assurance-bureau.co.uk/car-insurance/ ).
- How Do I Find Affordable Health Insurance?
We all understand the importance of health insurance. However with the raising costs of medical treatments, health insurance premiums are increasing. Many people are looking for ways to lower their health insurance costs. So the question becomes, "How do I find affordable health insurance"...
- How to Save Money and Get Discount Life Insurance in Illinois
The best way to get discount life insurance in Illinois is to take good care of yourself. Insurance companies award lower rates to those individuals who are in good health and maintain a healthy lifestyle. Actually, life insurance has a rather logical basis for underwriting. Statically speaking, t...
- Whole Life Insurance - Protecting You 100%
Life insurance is a gift to those we care about the most. When we are no longer there to provide for our family, we can still make sure that our loved ones are cared for and can still live and thrive even when we can no longer be there to provide the money that we otherwise would provide for our fam...
- When A Loan Becomes Delinquent, Why Involve Debt Collection Agencies?
It is a sad fact of everyday life that many consumers will at some point find themselves in debt. Whether the debt is accumulated through credit cards, personal loans, hire purchase, catalogues or utility bills, falling into debt is unfortunately becoming more and more commonplace in the UK. In some...
- Car Insurance & Lower Premiums
Car insurance is like many other things in life. In order to get the lowest prices (lower premiums) youve got to do a little extra work but its worth it. Take a look at the following thoughts your bank account will thank you later.1) Car insurance companies are like other businesses theyre inter...
- We Cannot Do Without A Health Insurance Plan
Health insurance plan is a plan which is taken by the individuals either for themselves or for their children, wife or any other relative of his individually or all in one with a family health insurance plan.Health insurance in todays world has become an absolute necessity. These days many people ar...
- Car Insurance - Freedom, Independence & Higher Premiums
Theyre in their early 20s, freshly out in the world and earning good money, driving flashy cars that are absolutely dripping with expensive extras. Who are they?Theyre the latest in crowd women. They are demonstrating their freedom, independence and individuality and are apparently earning the money...
- Individual Health Insurance Plans
Buying individual health insurance plans is a feasible option if you want to avoid falling victim to the escalating medical costs. Buying individual health insurance plans that cover your family is an ideal solution to keep your medical bills in check. This is even more important if you are self-emp...
- Whole Life Insurance Rates
Traditionally, there are two kinds of insurance policies - whole life plans and endowment plans. Whole life insurance plans have premiums that are paid for the lifetime of the insured and the proceeds of the plan are paid to the beneficiaries upon the insured death. In endowment life insurance plan...
- Positive Aspects of Whole Life Insurance
Nearly every form of life insurance has pros and cons. Here, we look at the positive aspects of whole life insurance.A discussion of the positives of Whole Life Insurance could very well begin with its major disadvantage. The Whole Life Insurance policy is generally more expensive. The annual premiu...
