You see the problem is apparently the sky rocketing cost of car insurance claims.
You have a car accident, you’re not injured but your insurance company sells your details to a claims company who then contact you to see if they can persuade you to make a claim for personal injury.
The car insurance company makes more money from selling your personal details
The claims company makes more money because they get more leads.
So who loses? In the long run surely insurance companies because they end up paying out more money. Of course they could choose not sell your details but if they if their competitors are making money from it then they are losing a competitive advantage by not doing it themselves.
But you could also take the view that if personal claim firms are paying the insurance company for the personal details of their customers then this must be helping to keep premiums down.
The insurance company is getting a stream of income that is not related to insuring drivers so that must help their bottom line.
But ultimately they are finding that they are paying out more in claims because more people are claiming for personal injury.
In the end of course it is drivers who end up paying the bill, or more specifically driver who either do not have an accident or drivers who have an accident which is their fault.
So the government has waded into the issue by wanting to ban the referral fees, ie the money the claims company pay the insurance company for the details of the drivers in accidents.
A Modified Car Insurance we believe the free market is the best regulator so any time the government wants to get involved in the car insurance industry it always rings bells for us.
With this case though it is hard to justify the free market sorting out the situation, or is it?
If you have been involved in an accident that was not your fault and you have been injured, finally you are getting the compensation you deserve.
Perhaps this increase in the cost of car insurance is perfectly normal. Perhaps car insurance has been too cheap for too long and the premiums being charged were in no way sufficient to compensate people for the physical injuries they were suffering.
I mean who is to say that the increasing price of car insurance is not entirely normal and is not something that should have happened a long time ago?
I am sure many people will argue that people are getting pay outs for personal injury even though they have not been hurt. If you are in that camp then you are talking about something entirely different.
If you believe people are being awarded personal injury claims even though they are not injured then you are talking about insurance fraud which is something entirely different.
Jack Strew has got onto the bandwagon saying that is it unreasonable for car insurance premiums to be increasing and that something must be wrong.
But what is he basing his findings on?
Why exactly does he think referrals fess are a bad idea?
Why does Jack Straw think it is wrong for the private sector to try to aid people injured in accidents?
But fundamentally it comes down to why Jack Straw think referrals fees are a bad thing?
The only conclusion can be that it is because car insurance premiums are increasing.
If Jack Straw’s ultimate aim is to reduce car insurance premiums then why does he not simply fix car insurance premiums?
The answer if obvious, there is no way to know if the insurance premium level set by the government would be sufficient to pay the claims.
And the same goes for referral fees. How does the government know that trying to outlaw these will make things better or worse?
It is just one more piece of legislation that makes it that more difficult for new companies to enter the market.
And one more point, who is going to be on the hook to make sure that this new piece of legislation is going to complied with?
Of course the tax payer is going to be put on the hook for enforcement and the driver is going to be put on the hook for the extra administration costs inflicted on insurance companies.
So my point is this.
On what basis does Jack Straw and the government believe increasing car insurance claims are a bad thing?
And why does Jack Straw believe outlawing referral fess will help anyone and how will he stop firms from paying one another in a way that is not called a “referral fee”?
Of course he cannot which is why the government getting involved is not going to improve the situation and is simply going to cost the taxpayer and the motorist money.
You have a car accident, you’re not injured but your insurance company sells your details to a claims company who then contact you to see if they can persuade you to make a claim for personal injury.
The car insurance company makes more money from selling your personal details
The claims company makes more money because they get more leads.
So who loses? In the long run surely insurance companies because they end up paying out more money. Of course they could choose not sell your details but if they if their competitors are making money from it then they are losing a competitive advantage by not doing it themselves.
But you could also take the view that if personal claim firms are paying the insurance company for the personal details of their customers then this must be helping to keep premiums down.
The insurance company is getting a stream of income that is not related to insuring drivers so that must help their bottom line.
But ultimately they are finding that they are paying out more in claims because more people are claiming for personal injury.
In the end of course it is drivers who end up paying the bill, or more specifically driver who either do not have an accident or drivers who have an accident which is their fault.
So the government has waded into the issue by wanting to ban the referral fees, ie the money the claims company pay the insurance company for the details of the drivers in accidents.
A Modified Car Insurance we believe the free market is the best regulator so any time the government wants to get involved in the car insurance industry it always rings bells for us.
With this case though it is hard to justify the free market sorting out the situation, or is it?
If you have been involved in an accident that was not your fault and you have been injured, finally you are getting the compensation you deserve.
Perhaps this increase in the cost of car insurance is perfectly normal. Perhaps car insurance has been too cheap for too long and the premiums being charged were in no way sufficient to compensate people for the physical injuries they were suffering.
I mean who is to say that the increasing price of car insurance is not entirely normal and is not something that should have happened a long time ago?
I am sure many people will argue that people are getting pay outs for personal injury even though they have not been hurt. If you are in that camp then you are talking about something entirely different.
If you believe people are being awarded personal injury claims even though they are not injured then you are talking about insurance fraud which is something entirely different.
Jack Strew has got onto the bandwagon saying that is it unreasonable for car insurance premiums to be increasing and that something must be wrong.
But what is he basing his findings on?
Why exactly does he think referrals fess are a bad idea?
Why does Jack Straw think it is wrong for the private sector to try to aid people injured in accidents?
But fundamentally it comes down to why Jack Straw think referrals fees are a bad thing?
The only conclusion can be that it is because car insurance premiums are increasing.
If Jack Straw’s ultimate aim is to reduce car insurance premiums then why does he not simply fix car insurance premiums?
The answer if obvious, there is no way to know if the insurance premium level set by the government would be sufficient to pay the claims.
And the same goes for referral fees. How does the government know that trying to outlaw these will make things better or worse?
It is just one more piece of legislation that makes it that more difficult for new companies to enter the market.
And one more point, who is going to be on the hook to make sure that this new piece of legislation is going to complied with?
Of course the tax payer is going to be put on the hook for enforcement and the driver is going to be put on the hook for the extra administration costs inflicted on insurance companies.
So my point is this.
On what basis does Jack Straw and the government believe increasing car insurance claims are a bad thing?
And why does Jack Straw believe outlawing referral fess will help anyone and how will he stop firms from paying one another in a way that is not called a “referral fee”?
Of course he cannot which is why the government getting involved is not going to improve the situation and is simply going to cost the taxpayer and the motorist money.
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