31 Aug 2011
Car Insurance News Round-Up - August 2011
The
August news round-up includes the car insurance-related issues arising
from the London, and other city, riots; evidence that car insurance
prices could be stabilising; an increase in car insurance fraud; and
the various legislative reforms in car insurance.
Our news section provides more stories
and analysis on
these and other topics.
Compensation for Riot Damage
While some UK car insurance policies appear to
exclude compensation for riot damage, the industry has said that all those
with comprehensive cover will be compensated for riot damage.
Indeed, once the Prime Minister confirmed that the rioting would be
officially recognised as such and therefore damage to property would be
paid for out of public funds, the insurance industry began to fall over
itself in offering
expertise to the Government to handle riot-related claims.
Car Insurance Prices Stabilising
There is evidence that the average price of car
insurance is stabilising. Indeed, it fell
by 5% in July, with young drivers seeing a 5.6%
drop.
With more insurance providers returning to profit, it is anticipated
that future car insurance price hikes will be modest compared to those
of recent years.
Increasing
Car Insurance Fraud
The latest figures show that there has been a ten-fold
increase in rogue claims management companies shut down by the
Government. Many 'speculative' or purely fraudulent car insurance
claims are a direct result of the aggressive case-generating practices
of some of these firms.
However,
would-be fraudsters do not seem to need any encouragement. A 9%
increase in car insurance fraud has been reported
while our own research has shown that 18%
are willing to lie on a car insurance application or claim.
Legislative Reform of Car Insurance
The lobby to abolish referral fees in car insurance
continues with Jack
Straw securing a debate on the issue in the House of Commons.
Yorkshire LIb Dem MP, David Ward, is the latest politician to add
his voice to the need for car insurance reform.
We recently reviewed the arguments
for retaining referral fees in car insurance, which are not
compelling, and reported on one insurer that said pending car
insurance reforms would increase the cost of car insurance.
In the meantime, the Government has laid out its response
to the ECJ gender ruling.
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