Is there a compensation culture and does it fuel increasing motor insurance premiums?

It didn’t take too long for me to collate the information in the below table which confirms that compensation claims relating to road traffic accidents have decreased with nearly 60,000 less claims being made in 2016 than in 2011.  Furthermore, 96% of those claims registered have been successful (with settlements paid to the claimant).

Therefore, this data (recorded and provided by the government) shows that there is no actual compensation culture and this has been repeatedly acknowledged by various reports and by both Lord Young and LJ Jackson when they were reviewing and reporting on the civil justice system.

Instead, the ‘compensation culture’ is a perception that the insurers are happy to keep pedalling in order to lobby for and justify reform after reform to reduce their outlay (payments made for compensation due to claimants injured by their policy holders).


comp cultureInsurers continue the widespread practice of paying out compensation to people who claim to have been injured without requiring any proof of actual injury. They also continue to contact injured people directly to offer payments before they instruct a solicitor.

In view of the actual data, the increase in car insurance premiums simply cannot be attributed to increasing whiplash claims and the ‘compensation culture’.

In view of this week’s reports concerning people unfairly facing increased premiums based on their ethnicity and recent calls for insurers to explain (and no longer continue) their practice of increasing renewal quotes as part of their auto-renewal processes, the insurers need to be transparent and come forward and show precisely how their premiums are calculated if they intend to continue to push for even more reforms to further reduce their liability for paying compensation to members of the public unfairly injured by their policy holders.


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