The report also highlights what your motor insurance premium pays for, and steps to take to help reduce the cost of cover.
The ABI’s five point plan for a fairer deal for motorists:
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Further reforms to the personal injury compensation system. While further plans to stem frivolous and exaggerated personal injury claims have stalled, with the number of soft tissue injuries1. rising, the Government needs to push much-needed reform higher up their ‘to do’ list. This delay is costing motorists nearly £3 million a day, and encouraging claimant lawyers and claims management companies to exploit the system at the expense of honest motorists.
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No further rises in Insurance Premium Tax (IPT). Successive rises have seen IPT jump by two-thirds in just under a year to 10%.These recent rises alone are likely to add an extra £16 a year to the cost of the average comprehensive motor policy. The Government must not increase this raid on the responsible, which hits people who have done the right thing in taking out insurance.
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Making young drivers safer. The Government should introduce changes to how young people learn to drive, such as Graduated Driver Licensing. This could help make them safer drivers, and help lower their motor insurance costs.
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Incentivising the development of safer vehicles. Autonomous Emergency Braking (AEB) is proven to reduce the frequency and severity of vehicle collisions, and the Government should consider making AEB compulsory for all new vehicles. Insurers already recognise this safety feature through a cheaper insurance group. Autonomous vehicle technology could further improve road safety, which is why insurers support its development.
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Tackling insurance fraud. In 2015 insurers detected 70,000 fraudulent motor insurance claims valued at £800 million. This is £800 million saved for honest customers. The industry will step up its clampdown on the cheats to protect honest customers, and the Government should implement the recommendations of the Insurance Fraud Taskforce.
The report also highlights what your motor premium pays for, such as bodily injury claims, which make up 37% of insurers’ costs, despite accounting for only 9% of total motor claims.
James Dalton, ABI’s Director of General Insurance Policy, said: “Every motorist wants competitively priced insurance that meets their needs. Consumers benefit from a very competitive insurance market, but insurers are facing the perfect storm of rising costs from personal injury claims, repair bills and Insurance Premium Tax.
“This report highlights what insurers are doing to help keep the costs of motor insurance down, and what more needs to be done to ensure honest motorists get the best possible motor insurance deal.”
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