The AA has recently blamed the personal injury sector for the massive rise in the cost of car insurance in Britain. According to Reuters news agency, the increase has been the biggest since the AA began its surveys back in 1994. However, fraud has added significantly to the cost of car insurance. Although the AA has maintained that the insurance sector is highly competitive, are the insurance firms involved making personal injury compensation claims the scapegoat for the vast bulk of the rise in insurance costs?
There is undoubtedly a lot to be said in favour of the AA’s case. In 2008, personal injury claims in the UK cost a colossal £9.6 million. This must have had a huge impact on the insurance sector. Motorists are being compelled to pay much more for insurance during the current recession.
However, known fraud accounted for a further £1.9 billion. Can the personal injury sector be blamed for the actions of dishonest individuals? Furthermore, it is not easily possible for ordinary people to establish just how much profit is being made by the insurance companies. In the absence of this detailed information, it is hard to assess the accuracy of the AA’s argument. As a provider of insurance, its impartiality is also open to question.
A road traffic accident can be a very traumatic event. Making a personal injury claim may be an appropriate thing to do in the circumstances. Car insurance may have gone up, but it may be the consequence of a complex interaction of different factors.
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