Auto insurance provides complete protection against losses happened as a result of vehicle accidents. Normally it includes car insurance and motor insurance. The customers purchase this insurance policy just to reduce the risk incurred due to accidents of cars, trucks and other vehicles. People can also secure their vehicles against theft, fire damage or accident damage. Auto insurance policy...

Car insurance premiums could be falling soon

Michael Challiner

The legal system in Britain currently means that all personal injury claims have to go through the courts individually. Many personal injury claims crawl through the courts at a snail's pace. The result is lengthy and expensive court costs, and for every Ł1 that is given in compensation, it has been estimated that the legal profession gets 40p. These costs have risen at such an exponential rate that the British legal profession gets around Ł2 billion a year just from playing its part in personal injury claim court cases.

These costs have to be covered by the insurance companies, and such is the cost to them that it is estimated that Ł200 of the average yearly car insurance premiums is to cover these legal costs.

It is because of this that the Association of British Insurers is proposing that personal injury claims should be taken from the courts, and instead into an independent arbitration system. This would set compensation payouts for different types of injuries, and would follow on from a similar system started in Ireland in 2004. There, legal costs resulting from personal injury claims have been decreased by 75%.

At the moment, personal injury claims go to court and are considered individually. If the arbitrator proposed by the ABI is set up, reference payments for each type of injury would make a huge difference to the time and effort involved in a court case. Using the Irish system as an example, a back injury that recovers within a year is allocated the equivalent of Ł11,000 and a neck whiplash injury, also recovering within a year, would receive a compensation payout of the equivalent of Ł9,400.

Ian Crowder from the AA has pointed out that the new proposals will take the lawyers out of the loop altogether, resulting in a massive cut in costs. He added: "There's no doubt that the soaring costs of personal injury claims has been a significant contributor to insurance premium inflation. If they could be brought under control, premiums could be cut," something that would be welcome by all parties.

Well actually, there's one party that wouldn't be so pleased: the British Association of Personal Injury Lawyers. They have already lodged their objections, based on their belief that the injured would lose their right to an individual hearing and payout based on the particulars of the case. They referred to research they carried out which showed the initial offers by the insurers to be around 50% of the final compensation agreed. They also pointed out that 66% of defendants at first denied liability, which is what led to a court case in the first place.

The legal profession's objections have not been found to be a problem in the case of the Irish experience since arbitration was introduced. Compensation values in Ireland are still at similar levels to payouts following court cases, with the added bonus of receiving the payout up to 3 times more quickly, and with legal costs slashed significantly to a quarter of the previous cost.

It could be an exciting time - we have seen car insurance premiums rise and rise over recent years, it's about time we saw a fall.

About the author:

Michael writes for Brokers Online ( http://www.life-assurance-bureau.co.uk ) who offer life insurance and car insurance ( http://www.life-assurance-bureau.co.uk/car-insura nce/ ).

The latest information and news on Car Insurance:

car insurance - Google News

Multi Car Insurance Policies - Lolita Storm (blog)

Multi Car Insurance Policies
Lolita Storm (blog)
Multi car insurance means that you are entitled to a discount if the car is registered to the same address. It doesnt matter if it is a spouses car, ...
Get the reviews of all cars at autodriver.com before buying a new carEarthtimes (press release)

all 3 ...
Farmers to Lower Car Insurance Rates for Some California Policyholders - Insu...

Farmers to Lower Car Insurance Rates for Some California Policyholders
Insurance Rate
Farmers move brings the insurer into compliance with a 2006 state law that altered the way car insurance providers could determine their premiums, ...
Farmers to cut auto insurance rates for some California customersL...
Do you lie to get cheaper car insurance? - This is Money

This is Money
Do you lie to get cheaper car insurance?
This is Money
Car insurance premiums have rocketed by more than 30% over the last year, from Ł538 to Ł704, an increase of Ł166, according to the latest research by AA. ...

and more »
Online Car Insurance Companies offers Free Car Insurance Quotes - Granite Bay...

Online Car Insurance Companies offers Free Car Insurance Quotes
Granite Bay View
Finally we discuss the type of low car insurance For having been the subject of a made temporary drop in traffic Either by moving to another country or ...
Local Company Offers Affordable Car Insurance QuotesLive-PR.com (p...
Ontario car insurance double national average on fraud - CANOE

Ontario car insurance double national average on fraud
CANOE
Consumers in Ontario pay almost double the national average for car insurance because of fraud and abuse, though efforts to ...
RBC warns of rising insurance fraudCTV.ca

all 5 news articles »
auto insurance - Google News

State Auto Financial Reports Second Quarter 2010 Results - MarketWatch (press...

State Auto Financial Reports Second Quarter 2010 Results
MarketWatch (press release)
Additional information on State Auto Financial Corporation and the State Auto Insurance Companies can be found online at www.StateAuto.com. ...
State Auto Financial posts wider-than-expected Q2 lossReuters
Storm Losses ...
Farmers to cut auto insurance rates for some California customers - Los Angel...

Farmers to cut auto insurance rates for some California customers
Los Angeles Times
The move, announced Tuesday, puts the company in compliance with a state law passed in 2006 that changed the way auto insurance providers could calculate ...
Farmers Insurance to cut auto insurance rates in CaliforniaCe...
Federal government or states: Who should be responsible for immigration ... -...

msnbc.com
Federal government or states: Who should be responsible for immigration ...
Wall Street Journal
... are here illegally and they pay little in taxes, do not have vaild drivers licenses and carry no auto insurance so my auto insurance continues to go up. ...
Arizona Law Questions: Racial Profili...
The Progressive Corporation Announces Investor Relations Conference Call - Ma...

The Progressive Corporation Announces Investor Relations Conference Call
MarketWatch (press release)
The Progressive Group of Insurance Companies makes it easy to understand, buy, and use auto insurance. Progressive offers choices so consumers can reach us ...

and more »
Storm claims rain down on Sask. insurers, topping $100M - Vancouver Sun

Nanaimo Daily News
Storm claims rain down on Sask. insurers, topping $100M
Vancouver Sun
The Crown corporation, which operates a general insurance business under the name SGI Canada and also manages the province's compulsory auto insurance plan, ...
Sask. damage claims over $100M following several s...