The cost of motor insurance

Written evidence from RoadPeace (CMI 34)

1. RoadPeace, the national charity for road crash victims, is grateful for the opportunity to highlight the need to consider the wider social cost of our motor insurance system and its implications on the price we pay with regard to our health and environment.

Reasons and consequences of recent increases in the cost of motor insurance

2. This inquiry to date has been focused on the cost of motor insurance premium, with consideration of the impact on the incidence of uninsured driving. While much has been made of the recent rises in the cost of motor insurance premiums, it is too early to tell the effect of the recently introduced streamlined procedures for road traffic civil claims.

Impact on young people of the high costs of motor insurance

3. This will encourage them to take up the more physically active and less polluting mode of cycling, assuming they are not intimidated by the volume and speed of motor vehicles.

Extent to which cost of motor insurance is influenced by the prevalence of road collisions, legal fraud, and the number of uninsured drivers.

4. RoadPeace is aware that when the problem of uninsured driving was reviewed several years ago by Professor Greenaway, he was not allowed to consider the system whereby third party coverage could be collected via the fuel levy. RoadPeace is also aware that the cost of uninsured drivers on motor insurance premiums has been reported to be £30 for many years, despite much effort in recent years to reduce uninsured driving.

Public policy implications of the rise in the cost of motor insurance and what steps the Government might take in response to them

5. A wider consideration of the social costs of our motor insurance system must include the inherent bias against vulnerable road users. Britain puts the burden of proof in road collisions on the injured , including when it is a pedestrian or cyclists. No consideration or allowance is given for the fact that

a) they will be the injured party and thus less able to provide evidence and

b) they are least likely to be represented by any insurance company.

6. In the majority of countries around the world, the burden of proof is reversed in collisions involving pedestrians and cyclists. Compensation is assumed owed to the pedestrian or cyclist casualty, unless it can be proven that they contributed to the collision. . RoadPeace refers to this system as ‘Stricter liability’. How the countries interpret contribution varies widely, even within Western Europe, but they all start with a different assumption than does Britain.

7. Stricter liability does not mean that irresponsible pedestrians or cyclists will be compensate. RoadPeace does support the system introduced in France and the Netherlands where children, elderly, and those disabled, do qualify for compensation, regardless of their actions.

8. RoadPeace has previously argued, most recently in an article in London Cyclist and in a presentation at RoSPA’s 2010 National Road Safety Conference, that without a system where a greater duty of care is placed on motor vehicle drivers, the long awaited cycling revolution is unlikely to occur. Getting people out of cars and onto bikes is critical for our efforts to tackle what David King described as the twin crises, obesity and climate change. The Sustainable Development Commission had also supported ‘stricter liability’ and we believe that it is basic to any sustainable transport strategy.

9. A few years back , it was reported that adopting such a system would add £50 to every policy but this estimate was never substantiated. RoadPeace has also tried to find evidence of its introduction on road casualties but this has proven difficult as it was introduced many years ago in some countries such as Germany or at the same time as other measures in other countries, including Denmark.

10. This enquiry was short and its scope was subsequently widened. RoadPeace requests that consideration be given to undertaking a separate enquiry into stricter liability. If this is not possible, then separate oral evidence sessions within this enquiry should be dedicated to stricter liability. More information on stricter liability systems can be provided by RoadPeace in 2011.

December 2010