Neil Sugarman, the President of the Association of Personal Injury Lawyers (APIL), has accused the Association of British Insurers (ABI) of using a “sickening tactic” to shift the blame for the insurance industry’s failure to control motor insurance premiums onto injured people.
Motor insurance premiums hit their highest recorded levels last quarter and rose more than five times the rate of inflation in 2016. The average price paid for private comprehensive insurance was £462. The highest figure previously recorded was £443, in the second quarter of 2012. The average premium over the whole of 2016 was 9.3% higher than the average premium over the whole of 2015.
The ABI has said that the Ministry of Justice could be about to pile more pressure on motor premiums through a cut in the discount rate – the mechanism used by the courts to adjust large compensation payments to take account of future investment returns.
But Sugarman has strongly criticised the ABI for trying to deny people with serious injuries from getting the correct level of compensation with the threat of higher car insurance premiums.
“People with life-changing, debilitating injuries face a shortfall in their compensation which in some cases could mean decades of their care needs are not accounted for, because the discount rate for personal injury is too high. The pressure and stress of this uncertainty for families is immeasurable,” he said.
“For insurers to try to deny these people of their very real need for compensation with the threat of higher car insurance premiums is a sickening tactic to shift the blame for the industry’s failure to control premiums.”
Rob Cummings, an assistant director at the ABI and head of motor and liability, said that motorists were bearing the brunt of a cocktail of rising costs associated with increasing whiplash style claims, rising repair bills and a higher rate of Insurance Premium Tax.
“While we support the Government’s further reforms to tackle lower value whiplash costs, it must not give with one hand and take away with the other,” said Cummings. “The sudden decision to review the discount rate has the pote