Introduction
1. Many people depend on their cars to travel to
work and for an active social life, yet for some the high cost
of motor insurance makes running a car too expensive. For too
long honest drivers have been bearing the cost - through higher
premiums - of a system open to abuse. This must change.
2. On 1 April 2013 the Government introduced a number
of reforms to the area of civil litigation funding and costs through
provisions in the Legal Aid, Sentencing and Punishment of Offenders
Act 2012. These reforms were aimed at removing unnecessary costs
from the system, and we have already seen a fall in premiums paid
by motorists - the latest ABI comprehensive premium survey (August
2014) shows a 13% drop in actual premiums[2]
paid over the past two years.
3. The whiplash reform programme published on 23
October 2013 complements and builds on these earlier reforms.
Action to reduce the number of speculative or fraudulent claims
made each year will lower the costs for insurers, and the Government
fully expects insurers to continue to meet their commitment to
pass on these savings to consumers.
4. The impact of fraudulent personal injury claims
on the cost of motor insurance is a problem which we are working
hard to tackle with our suite of reforms related to whiplash and
to personal injury claims more generally. We want to ensure the
right action is taken, with everyone playing their part; the Government
therefore welcomes the Committee's work.
5. This paper sets out the Government's response
to the conclusions and recommendations in the House of Commons
Transport Committee's first report of session 2014/15 'Driving
premiums down: fraud and the cost of motor insurance'. The Committee's
text is in bold, and the Government's response is in plain text.
Paragraph numbers in parentheses refer to the Committee's report.
2 ABI average comprehensive motor insurance premium
tracker -figures relate to Quarter 1 2012 and Quarter 1 2014.
Figures are not verified by Government. https://www.abi.org.uk/News/Industry-data-updates/2014/08/ABI-average-motor-insurance-premium-tracker-Q2-2014-data Back
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