As anyone who has a young driver in the family will know, the price of getting on the road is astronomical. A typical young driver will pay around £750 in lesson costs, a further £100 for road testing and, if they get that far, car insurance on a small-engined hatchback might cost you anything up to £2000 for a year.
There is no doubt that these costs are high and no doubt that they are rising and this has partly been blamed on the increase of contingent no-win-no-fee personal injury claims against young drivers and their insurers. To cover off this growing risk, premiums are pushed upwards, but to what extent are personal injury lawyers responsible for the changes?
Major and minor claims
When car accidents do happen they are seldom genuine accidents and often the burden of responsibility does lie with one driver. In cases of serious injury, a compensation payout is justly due to the injured party but usually far more than is affordable without an insurance policy. Though this does push up premiums, covering against major personal injury claims is the very core of what insurance protects against.
Minor injury claims are a little more difficult, however, and there has been a material rise in the number of cases where small settlements are agreed. Though the actual personal injury claim payout is small, the cost of legal fees is pretty well fixed and this does drives up insurance premiums artificially.
A Crackdown on Whiplash Claims
One of the main reasons that minor claims are taken to courts is whiplash. Whiplash may put the injured party out of work for a short period but, ultimately, the effects are medically very difficult to prove and have lead to a number of fraudulent claims and payouts where they weren’t due. The prime minister has described this as a ‘compensation culture’ and has promised to stamp out the problem.
Though in reality these claims do have an effect on what insurers charge, their significance shouldn’t be overstated. The payout in a whiplash case is only a tiny fraction of what will be paid-out in a more serious case and this is the figure which matters.
It’s a matter of fact that personal injury claims payouts do affect insurance premiums but it’s these claims that personal injury solicitors work long and hard to get right so that a just outcome might be achieved for everyone involved. Though a number of small, fraudulent whiplash cases do slip through the courts, it’s really not these cases which affect the big numbers from the insurance companies: it’s just a real reflection of the risks of being on the road.