Personal injury claims rise
The rise of Britain’s ‘compensation culture’ has resulted in people having to pay more for their car insurance and industry body has revealed. According to the Association of British Insurers (ABI) payouts for personal injuries suffered by members of the public has led to a general increase in premiums.
The organisation made the comments in the wake of new figures from Sainsbury’s which showed that the yearly cost of the average car insurance policy has risen from £486 to £514 over the past year.
Spokesperson Malcom Tarling from ABI stated: “Premiums reflect claims and the fact is the main driver for motor insurance premiums in recent years has been the increase in the cost of personal injury awards, which have been rising significantly." However, he added that people can save if they research and shop around. The ABI currently represent firms covering 94% of insurance producst currently sold in the UK.
Meanwhile, it is not only civilians who are experiencing a rise in personal injury costs. Members of the Armed Forces are facing a steep rise in personal injury insurance premiums because of the high risk in combat casualties in Afgan and Iraq.
The Ministry of Defence claimed that it was in discussion with the main company that provides a special private scheme for the Armed Forces, but there had been no decision as yet to increase premiums.
An MOD letter was leaked to the Sunday Times which indicated that the insurance premium was to double, from nearly £1,000 per year, and to increase even further by 160% in some cases. Around 58,000 military personnel have taken out private insurance under a scheme called PAX, which has been offered to the troops since 1989 by AIG Europe (UK).
Troops going into warzones such as Iraq have been encouraged to take out the extra insurance because the compensation paid for injuries by the Government scheme is limited. Des Browne, the Defence Secretary announced a change so that personnel who suffer multiple injuries or wounds would be assessed for each injury, not just the worst three injuries, which was agreed upon in the previous arrangement.
The idea that private insurers would even consider raising the premiums for personal injuries has sparked great anger. The Shadow Defence Secretary Liam Fox claimed that it was further insult to the military bond between the State and its troops: “They are being asked to put their lives at risk and to ask them to pay to do it is an insult.”
Nick Harvey, defence spokesman for the Liberal Democrats also supports the consensus that increasing the premiums is shocking. Harvey stated: “This state of affairs is as startling as it is shameful.”
Updated on 12/09/2008