DfT to discuss cheaper insurance measures

[obduro]

From the Daily Panic, and don't think it will come to much, seeing as the suggestions are getting more and more ridiculous...

Newly qualified drivers could be banned from getting behind the wheel unless they have someone over 25 with them.

The idea is part of a raft of measures being considered to tackle the soaring cost of insurance. Floated by the insurance industry, it is expected to be discussed at a Downing Street summit today.

The Department for Transport will consider giving drivers who have just passed their tests a probationary period where they must be accompanied by an experienced driver who is over the age of 25.

It has been suggested that new drivers, who are most at risk of having an accident, would then be safer on the road and so qualify for cheaper motor insurance.

Proposals on the agenda at the summit include:

> A crackdown on whiplash scams where people involved in minor shunts are being encouraged to make bogus compensation claims;

> A requirement for road accident victims to supply substantial medical evidence to back up any medical compensation claim;

> A ban on referral fees paid by ambulance-chasing lawyers to get details of accidents;

> A commitment to cut the £1,200 fee that lawyers can charge to pursue small personal injury claims.

The meeting will also outline plans to cut red tape faced by employers around health and safety rules.

Ministers say urgent action is needed to cope with a rise in compensation claims linked to road accidents and the resulting increases in premiums. Britain has become the whiplash capital of Europe with more than 1,500 claims a day. Insurance payouts for this add up to £2billion a year – £90 for every motor policy.

Separately, legal fees linked to accidents are a further £4.1billion, which adds up to another £121 per driver.

The average motor insurance bill is up 17 per cent in a year to £410, so adding to the biggest cost of living squeeze in at least 60 years.
However, young drivers are effectively being priced off the road with an average premium of £2,977 for a male and £1,682 for a female.

A source close to the summit said insurers could cut premiums for them by installing black boxes in vehicles to monitor behaviour.

These would guarantee cheaper premiums based on vehicles being used only in the daytime or on the basis they keep to the speed limit.

Downing Street claims the package will cut industry costs by hundreds of millions of pounds a year, which should be passed on to motorists through cheaper premiums.

David Cameron is expected to say: ‘I want to look at what action we can take to bring down insurance premiums and the costs for drivers, families, consumers and businesses.

‘I am determined to tackle this damaging compensation culture.’

But some consumer groups and lawyers fear the proposals will make it difficult for genuine accident victims to get proper recompense for injuries and loss of income.

Richard Lloyd, executive director at Which?, said the real reason for rising insurance costs is the huge fees taken by lawyers, insurance firms, garages, car hire and claims management firms.

His group will boycott the summit on the basis it makes consumers responsible for fixing the rip-offs, rather than tackling firms involved in so-called ‘claims farming’.

‘The Government needs to be on the side of the consumer’, he added.

Read more: http://www.dailymail.co.uk/news/article-2100736/New-drivers-supervised-25.html#ixzz1mMVevOEa

 

[jberks]

As you say - won't come to anything.
The premiums are primarily caused, as they say, by grab a grand whiplash claims.
My view, for what it's worth, is that rather than paying a lawyer, doctor and other hangers on, plus the grand for the claimant, they should bring in a simple 2 tier process.
You can bang in a claim simply signed by your own doctor and get an automatic £500.
Should you want more, then, they're going to want a series of medical examinations, by 2 separate doctors, carried out over a period of 3 years before agreeing to a bigger payout. 99.9% of claimants will take the £500. The rest will no doubt be genuine if they're prepared tpo go through all that hassle.
As for the 25 year old accompanying them - how? The only over 25 I knew when I was 17 was my Dad. I was hardly going to take my Dad out with me. In any case, by the time I was 18, I was driving for a living.
For 17 year olds, these black boxes make a lot of sense. In the US, some even have in car and out of car cameras. Young lads that are being watched will tend to be a lot more sensible.
The other thing is the cost. Insurers are always complaining about the cost of uninsured drivers, and then quote people unafordable premiums. Like tax, the higher it goes, the more viable avoiding it becomes. Bring down the premiums and more people will pay. More income for insurers with no increase in accidents brings down premiums - it becomes a viscous circle in reverse.
Of course there are some who won't pay at any price but thats what the Police and the local crusher are for.

 

[Rory]

Shooting myself in the foot here, but it must be that young drivers premiums are enabling older drivers to have cheap insurance - on one of our cars we pay less than the per driver amounts quoted above for damages and legal fees, and my MB insurance is only £250.

I gather that's what happens in other countries - young drivers don't pay as much as in the UK but older drivers pay much more than we do.

I agree it's stupid that the industry quotes huge premiums and then complains about uninsured drivers - the even more stupid thing is that when someone is caught driving uninsured the fine bears no relation to premium that should have been paid.

 

[turbopete]

about tme. i have had ridiculous quotes for my focus! more now, aged36 with a family, than i was paying at 34 with an E300TD! thats DOWN from group 16 to group 7 or 8, 2 extra years NCB etc! i pay more now than i did or my 1st car 19 years ago!!

 

[Silver_Star]

I agree it's stupid that the industry quotes huge premiums and then complains about uninsured drivers - the even more stupid thing is that when someone is caught driving uninsured the fine bears no relation to premium that should have been paid.

This is the other major problem in addition to the whiplash lawyers. There should be major consequences for no insurance, particularly serial offenders.

 

[Silver_Star]

about tme. i have had ridiculous quotes for my focus! more now, aged36 with a family, than i was paying at 34 with an E300TD! thats DOWN from group 16 to group 7 or 8, 2 extra years NCB etc! i pay more now than i did or my 1st car 19 years ago!!

It is indeed insanity. When I got my renewal quote through last year it had increased by circa £200. Despite having another years no claims and 3 points not having to be declared as they were over 5 years old. Same car, same address etc. They were not willing to negotiate so after 2 years I ditched them and went elsewhere. The price I ended up paying was more than the previous year by a good £70 still.

 

[Frontstep]

The high young driver premiums clearly point to a problem with the driving test.
The DVLA says you are competent and safe young X off you go,
The Insurance Industry clearly doesn't agree young X is competent and safe. Statistics do support the Insurance Companies stance.
The answer must be a rethink of the driving test.

 

[d215yq]

How about minimum £1,000 excess (or better still call it a fine) for the driver (even if company vehicle) for all at fault driving incidents - might make private and professional drivers alike drive more carefully knowing they will lose if they cause a crash.

Also absolutely zero payouts for passengers harmed by a driver - you get into a friend/familes car at own risk - you aren't paying for the favour so if they harm you it's unfortunately just bad luck and something you can deal with yourself.

Thirdly an independent organisation values cars and there is no negotiation - the amount of the car is paid immediately after accident so no car hire fees from claim management companies...pay the value of the car + £500 to allow for expenses/hassle of buying another one - absolutely NO EXCEPTIONS.

UK govt sets up it's own 3rd party only insurance (maybe through RBS/lloyds that it owns anyway) giving sensible prices based on few parameters (age, car, area, no claims history)...should be a big take up so can undercut the majority of other insurers and hopefully lead to a good few going bust so you don't get the needless duplications of 100s of companies doing the same thing and the absurdities like a garaged car costs more than one on a street or third party costs more than a fully comprehensive one.

Finally enforcement/penalties from the police and MOT based on things that cause death/high value crashes TO OTHERS, i.e. ridiculous speeding, driving with defective brakes, EXCESSIVE drink driving, dangerous driving, dangerous overtaking manouvres....and not the current nonsense of tackling 35mph in a 30 limit, people who drive after 1 and a half pints, cars with a carcked numberplate or slight fail on emissions, people without road tax, etc, etc.

And if all this doesn't curb insurance premiums by as much as the governement hopes they can always abolish road tax which effectively gives the motorist a £200 credit to pay for the inefficiencies on the insurance premium.