Car insurance quotes are getting more and more expensive all the time – it’s a common complaint which we hear constantly, but insurethebox aims to do something about that by offering high quality, yet cost-effective telematics car insurance.
“But just why is cover so expensive,” we hear you ask again. Read on and we’ll explain some of the reasons.
Fraudulent claims making cover more expensive
In January 2012, the Daily Mail reported on various factors for the increase in the cost of car insurance, and the causes were largely linked to fraudulent compensation claims.
The Daily Mail report presented readers with the story of a safe driver who, after meeting with a friend in August 2011, came back to his vehicle and realised that he had lightly scratched the front bumper of a taxi when he had parked earlier.
He swapped details with the taxi driver and took a photo of the minor vehicle damage, believing the incident had been handled sufficiently.
However, a month later solicitors contacted the motorist stating that they were representing the taxi driver who had accused him of driving recklessly. Furthermore, it was stated that the taxi driver had sustained whiplash injuries, which seems strange when he had not even been in his vehicle at the time of the incident.
This is just one of a plethora of cases which have been reported and forms the basis of why car insurance costs have soared.
Fraudulent whiplash claims and the cost for motorists
According to the Association of British Insurers (ABI) around 1,562 claims for whiplash injuries are made in Britain daily, and they cost insurance companies approximately £1.9 billion annually. Data on how many of these claims might be fraudulent has not been effectively detailed, but the fact that more claims are made in the UK for whiplash than in any other country in Europe may be an indication that such claims have a palpable effect on the insurance industry.
Reportedly, some drivers deliberately cause incidents so that they can claim compensation from the innocent party. For instance, a motorist might brake suddenly for no apparent reason so that the driver behind collides into the rear of his or her vehicle. The insurance company for the driver behind will then be liable to pay compensation for any injuries, such as whiplash, suffered by the motorist in the vehicle in front.
The impact on insurance
In 1994 the average annual car insurance premium was £333.39 – in 2011 it was £1,510.80.
Many commentators cite that bogus claims have been causative in increasing car insurance rates as each personal injury compensation claim means legal fees have to be paid to lawyers. The ABI states that for every £1.00 awarded in compensation by insurers, almost the same again is paid to legal firms for their services.
The cure for expensive insurance
In 2012, Prime Minister David Cameron announced that there would be changes made to the legal framework surrounding the compensation claim industry in order to stop innocent drivers having claims made against them.
Many political figures wanted a ban on referral fees – so that insurers could no longer make money from selling on the details of customers who had been involved in a crash to solicitors who could subsequently make money from handling the claim.
Searching for cost-effective car insurance quotes
Another simple way of mitigating the increase in the cost of motoring is by shopping around for car insurance quotes offered by different companies and, specifically, those which provide telematics car insurance, such as insurethebox.
Telematics cover has many advantages and could help you save money on your annual premium, so why not click on the get a quote button, or have a chat with one of our helpful staff members by phoning 0333 123 1308.