Cost of Car Insurance in Britain Has Gone Up 40% in a Year
The AA even goes as far as to say that for every £1 paid in compensation an additional 87p is paid in lawyers' fees.
“The record rises in fuel costs coupled with spiralling car insurance premiums is disappointing news and is making driving unaffordable for many, especially cash-strapped young drivers,” said Simon Douglas, director of AA Insurance.
The worrying fact is that this is the third year in a row that premiums have gone up by more than 30 percent, with the industry saying that most of the blame is to be found with settling personal injury claims following road accidents.
It is this which has led the insurance industry creating “no win no fee lawyers”, who seek damages on behalf of the innocent party in a crash. These lawyers are only paid if the claim is successful, but in such cases their fees are substantial.
Described as “ambulance chasers” by their critics, these lawyers have been held responsible for the bulk of the 200 claims made every day for injuries. The main problem is that, many claims are for whiplash, which is hard to disprove especially if the accident happened two or three years previously.
According to the Association of British Insurers, its members are paying out 87p in legal fees for every £1 they pay in compensation.