Personal injury complaints are becoming a personal insult

Car insurance firms are continually pointing out to motorists that the cost of cover is driven up by the number of personal injury claims.

The latest figures collated from the insurers themselves by the Financial Services Authority (FSA) reckons car insurance firms paid out £1.24 for every £1 received in premiums last year.

Insurers are partly blaming the increasing claims culture in the UK for their financial woes – which should be read as not making enough profits for their shareholders.

Actuaries Towers Watson have scrutinised car insurers’ financials to reveal that despite failing to make profits, the firms have squirrelled away more than £500 million of premiums paid in the year to set off against personal injury claims. That’s around 8% of the total premiums paid by drivers.

One of the problems of the rising cost of car insurance is the insurers are not helping themselves – an issue highlighted by a law firm in Sheffield offering to pay £600 ‘bounty’ on clients bringing them personal injury claims.

GT Law, is advertising the payment on black cabs in Sheffield.

The firm wants people to get in touch with contact details of a friend or relative who has been injured in a car crash.

A spokesman for the firm explained the move is aimed to cut out insurers and claims management firms who sell the leads.

“It’s perfectly legal, it’s just that it’s a new approach – trying to cut out the insurers and pay the money direct to the public,” he said.

The Insurance Blogger sees this as two problems.

One is the point of insurance is so you can make a claim if you suffer a personal injury or loss. Firms can hardly blame their customers for using insurance for the purpose it was designed for. The problem is not insurance but the insurer’s business model.

The other is surely car insurance firms are contributing to their own losses by selling customer details to third parties. This should come under data protection rules and should only take place if the victim has ticked a box consenting to have their details pimped on.

As an insurance payer, I would expect to have the option that any extra cash brokered in a shady deal by the insurer is either offered to me or is paid towards the costs my claim.