CAR INSURANCE NEWS

BIBA's response to Transport Committee Report:

‘Cost of Motor Insurance: follow up’

the Government needs to expedite its sharing of DVLA licence points data with insurance companies given that non-disclosure of points is common when applying for car insurance. In the meantime, of course, insurance companies are at liberty to ask for evidence of a clean licence, in the absence of any declared points, before processing any claims.

Graeme Trudgill (pictured), BIBA’s Head of Corporate Affairs, says that "BIBA supports access to justice for genuine claimants but agrees that drivers should not be railroaded by cold callers and text messaging into launching potentially questionable legal action that ultimately adds to the cost of motor insurance."

BIBA welcomed the recent introduction of continuous (vehicle) insurance enforcement (CIE) but also suggested that a review of sentencing guidance would be useful given the tendancy towards lenient, and non-deterrent, sentencing practices.

BIBA shares our analysis that banning referral fees is not a panacea in itself, or that the end of these fees will directly reduce motor insurance premiums.

BIBA sees the most important aspect of dealing with the excessive whiplash claims (that cost £2 billion annually) is to more effectively counter fraudulent claims. Trudgill comments: "More rigorous testing of alleged whiplash claims and a reduction in legal costs in this area is very important. We believe the attack on whiplash culture has to come from medico-legal evidence."

BIBA believes that the government should bring forward primary legislation to require objective evidence – both of a whiplash injury and it having a significant impact on the claimant’s life – before compensation is paid. The Transport Select Committee's position is to hold legislation in reserve, to be used only if other measures to 'raise the bar' on the diagnosis of whiplash are ineffective.

Because so many have a vested interest in keeping the bar low without a legislative 'stick' to make them behave otherwise, BIBA's positon (and ours) is the only tenable one - something the Transport Committee itself would possibly agree with - and this is why they could have been bolder in prescribing this legislation not as a fall-back but as a primary recommendation.

Lawyers will argue, of course, that the law currently puts the burden of proof on the claimant but, in practice, no evidence that cannot be manipulated is required before a whiplash claim is treated as legitimate. Injury lawyers do have a legitimate point, however, that insurers could more robustly defend a few test cases of whiplash; so creating more robust case law, even in the absence of primary legislation.

BIBA also made a pre-emptive strike in prescribing those areas that they would look to a cross departmental ministerial committee (tasked with reducing the cost of motor insurance) to address. In addition to those areas already outlined above, they are calling for greater regulation of claims management companies; the promotion of signposting to help people access suitable insurance (something that BIBA already undertakes and has considerable experience with); "further analysis" of the practices of price comparison sites to enhance clarity and fairness to customers; with regard to young drivers, they want a review of the Pass Plus system, review of the driving test, taking account of hazard perception, situational judgement and attitude awareness (all of which the Government is already starting to address, although they could go further); reform of the Northern Ireland legal system with regard to the handling of personal injury claims to reduce costs (in line with proposals in England and Wales - Scotland does not have the same excessive litigation problem; so reform there is less important although the Scottish Government is currently reviewing their arrangments for civil litigation); and "greater promotion" of CIE to reduce the cost of uninsured driving.

As a car insurance intermediary website, we would be likely to see things from a similar perspective to BIBA, as indeed we do. The above BIBA response is consistent with what we have been saying on this site, especially via our numerous industry reports.

We wait with interest to see how the Government will respond to this latest chapter in the fight against the high and rising cost of car insurance in this country.

Related article:
ABI response to Transport Committee Report