26 July 2011
Car Insurance News Round-Up - July 2011
Our
news round-up this month is dominated by road safety issues and the
continuing referral fees debate in car insurance that was ignited by
Jack Straw's 'racket' remarks in relation to car insurers' acceptance
of referral fees from lawyers when passing new clients on to them.
Our
new dedicated news section provides more stories
and analysis on
these and numerous other topics.
Road Safety in the UK
The Government’s ‘Strategic Framework for Road
Safety’ has been widely criticised and we report on strategies
that could usefully be considered by the Government if they wish to
meet the EU target of a 50% drop in road deaths by 2020.
Although the public are worried about children's
road safety next to their homes, improved
30mph speed limit adherence has reduced pedestrian deaths.
However, amid faster moving traffic on rural roads, slow
drivers frustrate motorists and can lead to accidents.
While many motorists, especially young drivers, are willing to allow
themselves to be distracted behind the wheel, reckless driving offences
push up the cost of car insurance. Driving
without due care adds 27% to the cost of car insurance.
The referral fee debate in car insurance
Following Jack Straw's remarks, the Transport
Committee has decided to re-examine the cost of car insurance.
A hardening of their stance on referral fees can be expected with the
likely recommendation of a ban. The Government is also showing evidence
of changing its position, with the PM declaring them "sympathetic" to a
referal fee ban.
Many car insurers that rely on "ancillary" income for profitability
could be vulnerable to a referral fee ban, including Cardiff-based
Admiral Insurance: Admiral
could become Rear Admiral if referral fees banned. However, in defending
their position on referral fees, Admiral declared themselves less
vulnerable to their loss than some pundits were suggesting.
Tim Oliver, President of the Forum of Insurance Lawyers (FOIL) sees a
referral fee ban as a potential trigger to car
insurers moving over to providing legal services 'in-house'.
Motorists
demonstrate lack of trust in car insurance providers
A survey
from direct car insurance and price comparison website
car-insurance-uk-supermarket.co.uk (this site) has found that most
motorists do not expect their car insurance provider to play fair if
they need to make a claim.
Cost of motoring
The Ford
Fiesta is now the UK's top-selling new car, indicating
that more people are down-sizing their car to reduce motoring
costs. Indeed, the increased cost of running a car has isolated
rural motorists that are now cutting back on their car use by
reducing their socialising and visits to their families.
The fact that the UK has the highest fuel tax in Europe does not help,
with 62%
of the price of fuel being tax.
Young people have been especially badly effected with the cost
of new driver insurance for popular first cars doubling over the
last twelve months.
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