With a number of years journalism experience, John is a personal finance journalist and editor providing regular daily news updates to the MoneyMaxim website. His area of particular interest includes house prices, mortgages and insurance. He works as News Editor at MoneyMaxim.
New research from Fitch Ratings revealed that motor insurance providers pay out £123 in claims for every £100 in premiums collected. This proportion is a result of the increasing number of fraudulent claims that drivers have made to their car insurance policy holders in recent years.
A leading car insurance company said that if they took the average insurance policy of £450 a year, about £220 of the premium is charged to cover the cost of whiplash claims, fraud, legal fees and tax – representing roughly half of the premium. Further data showed that with 20% of every motor insurance premium spent on whiplash, drivers are spending a large slice of their premium on this claim.
As the number of whiplash claims and motorists requesting the services of personal injury lawyers grows, honest drivers are paying the price for fraudulent claims, according to car insurance experts.
On top of this, figures say that each time a patient visits a GP for whiplash the Government pays an £18 consultation fee – which could total more than £8m per year. With the number of whiplash claims rising by 25% in six years, it seems inevitable that motor insurance providers will make up the shortfall by increasing their fees.
Car hire as a plan B
Taking into account the increasing costs of car ownership, the option of hiring a vehicle only as and when it is needed is becoming increasing appealing to drivers who've been squeezed by motoring costs. Compare car insurance quotes from the country's leading providers of car hire excess insurance to make sure that you get the best deal.
If that is not an option because you need to use a car on a daily basis, compare motor insurance quotes online to ensure you get the best value deal and that you don't pay over the odds for your car insurance.