More people are filing compensation claims in the UK for car accident injuries than ever before. Many believe that the rise in claims following car accidents is due to the “compensation cultural” in the UK.
Recent studies suggest that general injury claims are actually declining. Many legal areas, such as employers liability, are seeing a decline in claims and stagnating compensation awards. One area that is not in decline is the road accident and whiplash sector. It is very common for innocent road crash victims to file a claim for any injuries they sustained due to the legal coverage that is included with most motor insurance policies. People can easily file a claim after an accident. The injured party would have needed to look for a lawyer in days past. But nowadays the solicitor tends to be easier.
To locate the client after being instructed by the motor insurance.
The industry is full of paradoxes that many people are not aware of. Through their legal expenses insurance referral system, more than 80% road accident injury claims are actually generated by insurance companies.
In terms of their ability to create and sustain a compensation culture, the legal industry, especially solicitors, is often criticized. To rectify this imbalance, it is crucial that the public be made aware of the actual operation of the UK’s legal expenses insurance system.
Policyholders who pay for legal expenses insurance have direct access to panel solicitors selected by the insurance company. In the event of an accident, the policyholder will be referred to the chosen solicitors to pursue a personal injury claim. Many will then pay an insurer a referral fee. This can easily run into the hundreds of pounds. To comply with solicitor regulations, the injured claimant is informed of the payment by the solicitors in their initial correspondence. This arrangement is likely to result in insurance companies making hundreds of thousands of pounds of profit.
It is difficult to sympathize with the insurance industry when they complain about rising compensation costs. In essence, insurers have found a way of making a large profit while creating a lot of compensation claims that may not have been made. Although the cost to the insurance industry is far greater than the benefits of recouping referral fees on this basis, the practice is well-established within the motor sector.
Many other insurance types offer legal expenses coverage if a similar referral process is followed. Motor insurance is where the referral process has the greatest impact on the volume of business and the effect that these claims have on all motorists. Most insurers increase premiums every year.
The most common reason for an uplift is almost always soaring claims costs.
You might consider the following when you next receive your annual insurance renewal.
