Car Insurance Service

Car Insurance - Insurers initiative to drive premiums down

 

Summary

Recent proposals by the Association of British Insurers are set to reduce the cost of car insurance. This article explains.

 

Author: Michael Challiner

Did you know that around £200 of the average

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car insurance premium goes towards the risks associated personal injury claims? The ( term assurance ) Association of British Insurers estimated that for every £1 paid out in compensation for personal injury claims, the British legal system gets paid 40p. In fact, lawyers now cream off £2 billion a year to resolve legal battles for personal injury claims.

Most of these personal injury cases dawdle through the courts in ( life insurance policies ) lengthy and inevitably costly legal actions. Therefore, successful moves to cut these costs should result in a significant reduction in car insurance premiums.

In this context recent moves by the Association of British Insurers to ( cheap mortgages ) move personal injury claims out of the courts and into an independent arbitration system, are certainly to be welcomed. A parallel system was launched in Ireland in 2004 and as a result, their legal costs have been sliced by 75%.

The arbitrator proposed by the ABI would map out reference ( loans ) levels of compensation for each type of injury instead of claims being decided individually in court. For example, in Ireland a neck whiplash injury to the neck that recovers within 12 months is allocated £9,400 and a similar back injury is allocated £11,000.

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