The Commons Transport Committee in the United Kingdom has been hearing about how claim firms, credit hire companies along with unscrupulous and unprincipled lawyers have made motorists pay in the region of £2 billon more per year in insurance cost than they normally should be. Jack Straw, Blackburn Labour MP, has delivered a report which blames the suing culture of the UK as the reason for the lack of cheap car insurance.
Mr Straw slammed the practice of cold calling by accident claims firms. He said that when he was preparing his report the previous night, he received a phone call from a company who asked him if he would like representation from an accident. Mr. Straw stressed that he had not been in any accident and the phone call just proved how widespread the problem had become.
The Justice Minister, Jonathan Djangoly, said that the government should ban the referral fees so as to cut down the insurance claims being made by greedy insurance companies. He pointed out that drivers were being told by lawyers that they could not lose a claim and the drivers, spurred on by this statement, usually went for it.
The Roads Minister, Mike Penning branded the claims companies as ‘ambulance chasers’. He said that he found it appalling that some organisations were seeking to profit from someone else’s injuries. According to some reports, almost half of all motor insurance claims are made for personal injuries.
The comprehensive car insurance which is taken our annually went up, on average, from £636 to about £892 over the year ending in March. By June, that amount was £923.90 and is likely to reach four figures in the near future.