Myclaim Market Update May 2010
Car Insurance Premiums Stall
Latest figures from the British Insurance Premium Index indicate that motor insurance premiums, for both comprehensive and third party fire and theft, have fallen slightly in the first quarter of 2010. According to Simon Douglas, of AA Insurance, this can happen during the first quarter as it is when most cars are sold historically and most policies renewed, so competition is at its greatest. Mr Douglas expects premiums to rise over the rest of the year, to double digit increased by the end of the year. Fraud and personal injury claims are the driving force in pushing up premiums.
Bradford and Bingley motor and home insurance brought by Junction
Following the transfer of Bradford and Bingley to public ownership, its motor and home insurance business has been purchased by Junction. Junction have acquired a ten year license to carry on these business under the Bradford and Bingley name. The acquisition should be seamless as far as Bradford and Bingley insurance customers are concerned and allows Bradford and Bingley to focus on their remaining mortgage business.
Restrictions on Quinn Insurance eased
Following concerns over its ability to deal with its level of debt, Quinn Insurance was placed in administration by the High Court in Ireland in measures taken by that country’s Financial Regulator. Initially restrictions has been brought in to stop the group writing new policies for customers in the UK, but the Financial Regulator has now eased these and the company may write new policies for provisional licence holders in the UK.
This follows worries over jobs at the company and also the interests of the company’s customers.
New RTA regime to start 30th April
The new regime for dealing with low value road traffic accident claims is due to commence Friday 30th April. This relates to road traffic claims on or following that date where losses are between £1,000 and £10,000 (as defined under the scheme) which is estimated to include about 80% of all accidents of this sort.
The procedure involves the Claimant or the Claimant’s solicitor submitting a form with the appropriate information on it to the Defendant’s insurer, who then has fifteen days to respond to it. If liability is denied or contributory negligence raised (for a reason other than relating to wearing a seatbelt) then the claim is not progressed further under this scheme.
The second stage, which therefore assumes liability to some degree is admitted, requires the Claimant to gather evidence to complete a settlement pack including medical evidence to the Defendant with an offer to settle the claim. The insurer then has a fifteen day period from service of the settlement pack to accept or reject this offer and if appropriate make a counter offer. If the claim is not settled at this point, twenty days of negotiations are then allowed.
If the claim is not settled by the end of the second stage then it passes onto the third stage. The Claimant or his solicitors prepare the documents necessary for this stage to the Defendant’s insurers who then have five days to check it and make any comment. The Claimant then applies to the Court with this documentation and the Court then sets the matter down for an adjudication. This can be on the papers or a Court hearing can be requested. The Court has to provide 21 days notice of this hearing date.
The electronic portal has to be ready by 30th April and both Claimants and their solicitors and Defendants and their insurers will need to be ready to comply with the tight timescales laid down by the new regime it if is going to work.
Land of Leather “toxic sofa” claims rejected
After a spate of injuries suffered by customers who purchased sofas containing a toxic chemical, claims were brought by a large number against one of the suppliers, the now defunct Land of Leather. As Land of Leather had gone out of business, the claims were redirected against their insurer Zurich.
The claimants have been frustrated though due to a clause in the contract of insurance between Zurich and the furniture company. This stated that the insurance would be void if Land of Leather settled any cases without permission of its insurers. In this group litigation they argued successfully that as Land of Leather had come to an arrangement with the company supplying the sofas to it without their permission, this voided the policy. As a result it appears that those injured due to the sofas will not be recovering compensation.
Don’t Tweet and Drive
In car social networking, such as accessing facebook and twitter on a mobile phone whilst behind the wheel of a car, has increased the number of accidents according to Swinton Car Insurance. These accidents typically occur in slow moving traffic due to lack of attention whilst using the net on a mobile. This can lead to a criminal conviction and increased premiums for future motor insurance.