While the Government plans to reform personal injury claims, new research suggests the public do not have faith in insurance companies living up to their word in passing their savings back to consumers.
The findings come in new research carried out among the general public by You Gov on behalf of campaign group Access to Justice (A2J) which opposes government plans to remove the rights of accident victims to gain redress for their injuries. According to A2J, the Government is proposing that people making personal injury claims worth up to £5,000 would have to use the small claims court and cannot recoup the cost of any legal advice. In addition, they would no longer be able to get any cash settlement for pain and suffering caused, although they would be able to claim for physiotherapy and loss of earnings.
The changes are estimated to lead to significant savings for insurance companies – in the region of £50 per policyholder, according to research. However, now A2J’s study suggests the public do not believe they will reap the rewards.
It found that 77% of the public do not believe insurance companies will hand customers any savings made from the proposed government reforms. Indeed only 11% said they trusted insurers to live up to their promise and reduce car insurance premiums if the reforms become law.
A2J spokesperson Andrew Twambley said: “The research proves that car insurers have a trust problem. The public do not trust insurers and they do not believe they will act in consumers’ interests if these reforms go through.
“However, nobody should be surprised. Insurers promised to reduce motor insurance premiums after the last set of government reforms, in 2012, but car insurance is more expensive now than at any time during the last four years.”
The headline findings show that 73% of customers do not believe insurers care about them (against 15% who say they do care), and furthermore, 17% said insurers are the least trusted among a number of service providers including energy suppliers (14%), banks (13%), mobile phone companies (11%), councils (10%), ISPs (5%) and financial advisers (4%).
Twambley said lack of trust was also key when it came to victims making a claim against their motor insurer.
“60% of customers believe they would be treated fairly by their own insurer if they had legal support, against 23% of drivers who believe this would happen without legal help,” he noted.
But the situation is much worse for non-fault customers injured in a car accident. Asked whether the other driver’s insurance company would treat them fairly without legal help, 71% said no. Only 15% said they trusted the other driver’s insurer.
Twambley believes that in recent years, insurers’ balance sheets have been hammered by low investment returns, and this was the real reason why they were so keen for personal injury reform to go through Parliament.
“These reforms will mean they pay out less to customers in claims and instead maintain dividend payments to their shareholders,” he said. “So shareholders will gain at the expense of ordinary people, who will lose their legal rights.”
What do you make of the results of the report and the controversial comments from A2J? Leave a comment below with your thoughts.
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