Former Justice Secretary Jack Straw is calling for a shakeup of the car insurance industry. Mr Straw claimed that car insurance premiums are being pushed up as a result of companies selling on personal details to competitors.
Many of those who have been involved in a car accident are being approached by personal injury lawyers. The number of personal claims has risen dramatically over the last year, ultimately making car insurance premiums higher.
This secret circle of trading information is having a dramatic impact on British motorists. Pushing up the cost of cover for those getting behind the wheel.
On average, insurance premiums rose by 31 per cent last year.
Mr. Straw is accusing companies of ‘ambulance chasing' and states that the ‘racket' must be stopped. Car insurance has already risen dramatically this year with the gender ban ruled by the EU in March.
Lifting the lid on the insurance industry, the MP uncovered the scandal after investigating complaints from constituents. On confronting two big insurers they admitted that they were selling on personal data to claims companies. This surge in claims for personal injury has increased insurance premiums across the board. According to The Guardian, UK car insurers collectively lost more than £2bn despite pushing some of the highest prices for new businesses.
The cost of a personal injury claim has doubled in the last 10 years as they often dress up a ‘whiplash' injury for severe shoulder pain.
The MP for Blackburn is calling for an overhaul of the industry, naming and shaming insurance firms who do not comply with a deal to change the current process.
A director from the Association of British Insurers, Nick Starling, praised Mr. Straw's efforts by saying "it was not right for companies to increase revenue by soliciting customers' information”.
Mark Bower, Managing Director of MoneyMaxim said "Our customers are telling us that this practice not only annoys, but brings the insurers into disrepute – on one hand they are blaming such claims for higher premiums whilst on the other they are encouraging them. We had one experienced driver last week who had been called by his insurer three times after a ‘no fault' accident to see if the minor bump he was involved in had resulted in any whiplash injuries yet!”
The cost of car insurance has shot up over the last year. Recent research found that newly qualified drivers can expect to pay almost double what they would have last year.