A report from the Transport Select Committee last week called for “greater transparency” on the referral fees paid by injury lawyers seeking to represent the victims of car accidents. But would transparency alone be enough to put the brakes on the ‘compensation culture’ that is forcing all of our insurance costs through the roof, or does the government need to step in with legislation?

“Wider access to justice is to be welcomed, but it has come at a significant cost, with far more personal injury claims being made than in the past.” These were the words of Louise Ellman, Chairman of the Transport Select Committee, as she presented a report to MPs that called for personal injury lawyers to be open about the fees they pay to garages and insurers in exchange for personal information about people involved in car accidents.

Her recommendation was for the insurance industry to work with the police to tackle an issue that is spiraling out of control. The report painted a disturbing picture of a “merry-go-round” in which injury lawyers and accident management firms pay referral fees for information, prompting more and more people to make personal injury claims, with the burden of compensation for those claims then falling on the shoulders of insurers, who then have to increase the price of their premiums.

Ms. Ellman said: “The police made plain to the committee that ‘staged accidents’ are on the increase and that, so far, we have been lucky there have been no fatalities resulting from such incidents.

“That luck may run out unless the insurance industry acts rapidly to help the police target this kind of fraud.”

Clearly there is a significant issue here, when the statistics show that the number of people killed or injured on Britain’s roads has dropped from 341,592 in 1989 to 222,146 in 2009 and yet, over the same period, the percentage of motor insurance claims cost attributed to bodily injury claims has gone from 20 per cent to 50 per cent.

The rising cost of insurance premiums is startling, with the average price of a policy expected to go up by 40 per cent this year.

Moneysupermarket car insurance expert Peter Harrison said: “It is more important than ever at the moment to make sure you get the best deal on cover, especially when escalating fuel prices and the rising cost of insurance cover is hitting motorists hard. Our analysis shows car insurance prices increased by 31 per cent in 2010 – or 44p per day.”

The referral fee issue is not, however, seen as significant enough for the government to step in with legislation.

In 2010, the Lord Justice Jackson report recommended a measure to curb the growing trend in personal injury claims. He proposed that the losing party in personal injury claims should not have to cover the legal costs of their opponents and he called for referral fees paid by personal injury lawyers should be banned.

Global financial management organisation Towers Watson criticised the Transport Select Committee report for not recommending the implementation of Lord Jacksons measures.

In a statement, Towers Watson’s Duncan Anderson said: “The committee has recognised that there is something not right about bodily injury claims costs rising 30% annually when the number of traffic accidents has been decreasing steadily for a number of years.

“But I would like to have seen a stronger endorsement for the recommendations of the Jackson Review rather than recommending a further study next year into what can be done to bring the level of personal injury claims more into line with other countries.”

He added: “It’s really only accident management companies and personal injury lawyers who refute the link between referral fees/‘no win, no fee’ arrangements and bodily injury costs. One only has to look to the evidence presented on the regional differences, particularly between England and Scotland, to understand the effects.

“Calling for transparency on referral fees throughout the insurance industry is good for the consumer, but delaying addressing the underlying issues certainly is not.”

Male motorists all over the country are probably feeling slightly smug this week, as the European Court of Justice has decreed that disparity in the price of car insurance premiums is unfair.

The fact that women pay less for their car insurance than their hairier equivalents is one of those things that has just become accepted in recent times and we’ve had companies like Diamond and Sheila’s Wheels doing good business out of this anomaly.

Car insurance equality

We all know, traditionally, why this has been the case.

Statistically speaking, men have more road accidents than women. That cannot be denied. When things do go wrong, the crashes in which women are involved tend to be low-speed knocks and parking misjudgments. When men have a crash, they tend to do it in style.

However the ECJ evidently thinks that that is no reason to apply broad-brush differentiation between male and female drivers. Now, a driver’s sex should not be the most prominent criterion when insurers are assessing who is more likely to be knocking on their door to tell them they’ve just decimated a small village.

Usually the focal point for grumbling and muttering, the Court has endeared itself to millions of male motorists by paving the way for their premiums to come down, on the basis that to discriminate on the grounds of sex is fundamentally wrong.

One wonders whether this means that male drivers will notice a decrease in premiums, or whether the insurance companies will make themselves even less popular than they currently are and merely charge everyone the same premium across the board.

Insurers have bemoaned that they are not making any money, what with personal injury claims allegedly hanging them out to dry (although their frequency has only increased in line with the numbers of cars on the road) and the rise of ‘crash for cash’ schemes.

The latter involves a corrupt group of individuals all working in league with each other to make money from insurers by causing deliberate car crashes and then milking the system for every penny it’s worth.

These delightful, upstanding members of society tend to drive slowly until their unsuspecting victim, wondering what’s going on, zooms up to the back of their vehicle and then proceeds to slam into the back of it. How did that happen? Well, it goes something like this:

Scammer disconnects brake lights, stands on brake pedal, causes accident, claims for vehicle damage, personal injury (verified by crooked doctor) and fraudulently pockets lots of money, passing the cost on to insurance company’s customers.

If women want equality, they have to take the rough with the smooth.  Equality across the board. Unless, we are smart and sensible enough to realise men and women are actually different and better and worse at different things, now there’s a thought! For a car insurance quote you can try www.lv.com.

Joy of motoring

Although most of us get in them every day in order to get from A to B, or as is often the case, from home to work and back again, cars don’t have to be completely associated with the trip to the workplace. Naturally, the fact they have become such common features of many peoples’ lives has in most cases detracted from that sense of joy and possibility that characterised motoring when it first became popularised around a century ago.

Driving can be something enjoyable as well as functional, and not just for people who meet at motoring clubs at weekends, but for anyone looking for a good break as well. Just as Britain is famous for its walking holidays and the surrounding scenery, so should it be known for the beautifully scenic drives that are on offer, giving us landscapes that capture the saying ‘the journey is as important as the destination’.

Here are a few great routes to check out:

• Glasgow to Skye: although it may be far for some people to get to Glasgow in the first place, let alone continuing up to Skye, this is a truly special drive. Taking in such sights as Loch Lomond and Loch Linnhe, this is best embarked upon during the height of summer when the sun blazes brightly over the still snowy mountain tops either side of the road.
• North Devon Coast: if south west England suits you better than Scotland, this stretch of road alongside what becomes the Severn estuary has that wild, rugged beauty the makes the West Country famous.
• The A470: inauspicious as an A-road may sound, this drive through Wales shows up some of what makes this corner of Britain so popular among tourists looking for stunning scenery.

What is fantastic about these routes is their distance from so much of the rest of civilization, and at times you can feel wholly removed from the realities of modern life. Sometimes this very seclusion could ruin your trip, especially if you have the misfortune of breaking down miles from the nearest town or garage.

Therefore, before embarking on any road trip, make sure you take out proper cover with a reputable provider. The Co-operative Insurance, for example, offers a good level of cover and extra benefits when you take out a car insurance policy with them online – such as providing a courtesy car while yours is getting fixed. Once the insurance is sorted you can then set about on enjoying the open road.

Running a car can be expensive, and for families looking to cut their expenditure during 2010, it may be a luxury that they’re prepared to forgo. But you don’t need to sell your car if you need extra cash, and there are plenty of ways that you can make your pounds go further when it comes to driving. Just a few changes to the way you pay for or run your car could see you save hundreds of pounds. Take a look at this article for some money saving car tips.

Pay Off the Payment Plan

If you’ve bought a car on finance, then it’s more than likely that you’ll be paying interest at a higher rate than you could get. Car finance is often sold on the forecourt, and it can make the dealership good money because the interest rates are normally between 15-20%. It’s much better to arrange your own finance for your car through a bank. If you have a decent credit record, you should be able to arrange a personal car loan of up to £10,000 at a rate between 8-12%, which is much lower than what you would typically pay on the forecourt. If you already have car finance, then you could take out a new loan at a lower rate and then pay off your existing debt with it – you’ll be much better off in the long term if switch finance; it could save you hundreds of pounds.

Watching Your Revs

It’s not just buying a car that can be expensive, but running it can be a financial blow too if it needs a lot of maintenance. Fuel prices in Britain are notoriously expensive, and it’s unlikely that we’ll see a substantial drop any time soon. One of the best ways to save on your fuel is to combine it with your weekly supermarket trip and use the petrol station there. Not only are supermarkets often cheaper, but spending on petrol with a loyalty card is a great way to lack up precious points and receive vouchers. Other ways to save on petrol is to watch your revs. Always use your hand break when stopping for short periods on slopes, and don’t stay in low gears for too long. It might feel satisfying to fire your engine like Jenson Button, but you’ll be worse of financially if you keep doing it. It’s not particularly good for your engine either.

Road Tax and Car Insurance

Road tax and car insurance are a legal requirement for drivers. Not having either of these can lead to heavy fines and even having your car crushed or, in the case of an accident, serious legal bills. Road tax is fixed according to the the government’s budget, but with a relatively cheap two wheel drive you should find yourself in one of the lower brackets.

Car insurance, meanwhile, differs from provider to provider. You will need to shop around if you are to get the best deal, and be ready to switch from your current provider if you think you can get a better deal elsewhere. Take a look at a few price comparison websites but it can also be useful to check some individual providers that may not be listed on these comparison sites; car insurance from Kwik Fit Insurance comes with a 20% online discount for instance, so keep your eyes peeled.

Guide to making your car insurance as cost effective as possible!

Car Insurance can be a very expensive purchase, one which many people dread. Car insurance is a legal requirement so making sure you have adequate cover is extremely important.

This guide, brought to you by moneyaupermarket.com, aims to highlight some of the best money saving tips for car insurance.

Top money saving tips:

• Increase your voluntary excess limit to the very highest you can afford. This will significantly reduce your premium.
• Opt to get fully comprehensive cover; this way even if you cause damage to your own vehicle you will be covered.
• Chose named driver insurance.
• Cap your mileage if possible. Make sure you are accurate in your estimation of how many miles you cover though.
• Parking your car on your drive or in your garage overnight can significantly reduce the cost of your premium.
• If you have recently started driving it is worth checking out the Pass Plus course, some insurers will give up to 10% discounts if you have completed the course.
• Choose the smallest possible engine size for your needs, if you only intend on driving occasionally or short distances then cutting your engine size down will help reduce your insurance cost.

Follow these tips to make sure you save money on your premium, and then use our comparison service to find the best deal for your Car Insurance.  Moneysupermarket compares more than 100 motor insurers to help you find an affordable car insurance policy that offers the level of cover you need.