Motorists falling victim to insurance policy charges
Personal injury claims have taken a severe beating in recent weeks, being made the scapegoat for inflated insurance premiums. However a recent investigation by Which? shows insurers are charging customers “exorbitant fees” for tiny policy alterations.
According to the research, insurers AXA and Hastings charge £30 and £35 respectively to change an address, update a surname (i.e. after a marriage) or change the vehicle cover.
Budget customers face a £75 cancellation fee whilst AXA, Zurich, Sheila’s Wheels and More Than consumers are charged £50.
Customers are also punished if they are unable to pay their premium in full with Budget and AXA charging between 29.3% and 32.3% annual interest.
Peter Vicary-Smith, Chief Executive at Which?, describes these charges as a “disgrace”, stating the charges should reflect the cost to the company and “not a way of making easy money”.
The personal injury industry is currently awaiting the implementation of the Legal Aid, Sentencing and Punishment of Offenders (LASPO) bill expected later this year. The bill is the vehicle to take forward the proposals of the Jackson reforms and is expected to include details on the proposed ban on referral fees and the restriction/abolishment of success fees and ATE policies.
Simon Cottrell, Senior Partner at Goldsmith Williams, welcomes the Government’s investigation into fraudulent claims but understands there is a bigger picture:
“Clearly, there are problems within the industry and I welcome the fact the Government is looking into it, but there is a deafening silence as to how much the insurance industry would be prepared to reduce premiums by if the Government were to uphold some or all of the recommendations put forward.
“The sector is claiming that premiums have risen as a result of whiplash injuries and fraudulent claims, but the reality is that the cost of insurance has rocketed as a consequence of many factors. Premiums have increased due to the need for insurance companies to make profits in a depressed market.”
Content correct at time of publication