Motoring Discussion > Car Insurance Costs Tax / Insurance / Warranties
Thread Author: Manatee Replies: 13
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New Mon 27 Aug 18 14:36 
 Car Insurance Costs - Manatee
Wilst sorting out my MX-5 renewal with Quotemehappy.com, I came across this breakdown on their website.

74% Claims
10% Operating & Marketing cost
12% Insurance Premium Tax
3% Profit

The claims cost is then split as follows:

49% Third Party Personal Injury e.g. whiplash
22% Own car damage
23% Third Party car damage
3% Theft
2% Windscreen
1% Fire

This clearly isn't too rigorous as 12% IPT means the IPT is only 10.7% of the total cost, but interesting nonetheless assuming it's somewhere close to the truth. I would suggest fraudulent PI claims are still a big cost.
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New Mon 27 Aug 18 14:56 
 Car Insurance Costs - Bromptonaut
>> I would suggest fraudulent PI claims are still a big cost.

Would certainly be interesting to see a breakdown of the injuries in PI claims. Certainly could be too many claim factory farmed whiplash and similar cases. OTOH it's only about 30 years since the first million pound damages award (a young doctor who suffered chronic brain damage after undergoing routine surgery). Nowadays a promising young life ruined can result in settlements well above 20 million.
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New Mon 27 Aug 18 15:27 
 Car Insurance Costs - No FM2R
Total motor insurance claims paid have been falling year on year since their high of £10.5Bn in 2010. 2016 was about £7bn.

Motor premium income had maintained comparatively the same level at around £8bn other than an aberration in 2011 of about £9.5bn (presumably due to the experience in 2010).

2010 represented a £2bn underwriting loss for UK insurers, whereas usually around break even is more normal. A profit of £33m in 2015, was the best year recently.

The average cost of an injury claim is approximately £10k. There about 70,000 fraudulent claims per year at a cost of around £800m. This is not particularly changing as far as I can see, certainly not by much.

I think these figures are reasonably accurate, no promises though. I can't see that I have access to any claims by type, statistics but I've only had a quick look.
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New Mon 27 Aug 18 16:33 
 Car Insurance Costs - zippy
>>Personal injury claims.

One of my clients was a "detective agency" for the insurance cos. They filmed suspected personal injury cheats and made a tidy profit.

We dropped them as a client when they started to film a 15 year old 24/7 who was run over by a car but hadn't made a claim. The insurance firm felt that a claim may be made in the future. (The 15 year old was at fault.)


My firm also referred the matter to the ICO and to the police as it was felt that following and videos of a 15 year old's activity was not appropriate.
Last edited by: zippy on Mon 27 Aug 18 at 16:36
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New Mon 27 Aug 18 16:50 
 Car Insurance Costs - Falkirk Bairn
Personal injury claims are made up mostly of extremes - minor, say £1000 - £5,000 but lots of them.

The really costly ones are 3rd parties with "life changing injuries" - high earning family man, 3 kids & wife earning £200K per year needs 24x7 support for maybe 20- 30 years. It would be cheaper to settle if the victim died - a 1 off payment of say £3 million would be cheaper than megabucks lump sum + maybe £200K+ per year for the victim's lifetime.

I know of a young man who got £1.5m for the death of his father 25 yrs ago - blew the lot in 5 years - the only thing he still has is a very tired Aston Martin.
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New Mon 27 Aug 18 20:24 
 Car Insurance Costs - Fullchat
"There about 70,000 fraudulent claims per year at a cost of around £800m."

One could ask the question, if they are are catagorised as fraudulent then why are they paying out?

Or is this something within the industry whereby on the balance of probabilities the claim is fraudulent but either the claim is fairly robust and difficult to disprove or the costs of fighting it would exceed the payout?
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New Tue 28 Aug 18 05:52 
 Car Insurance Costs - Falkirk Bairn
>>There about 70,000 fraudulent claims per year at a cost of around £800m.

70K claims may be BUT how many ended with cheques in the post 10%? 50%?
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New Tue 28 Aug 18 06:56 
 Car Insurance Costs - Manatee
By definition, the successful frauds can't be measured, unless they come to light subsequently. And if the £800m is a cost, that is presumably paid out and may largely be an estimate.

IMO most whiplash is fraud. I can't substantiate that at all. I only associate knowingly with decent people and I don't know anybody who has claimed for.whiplash.
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New Tue 28 Aug 18 14:05 
 Car Insurance Costs - Stuartli
I thought that the insurance companies took action some time ago to help eliminate so many fraudulent claims for whiplash?

However, I do know people who have genuinely suffered whiplash in accidents and the pain and inconvenience has last for some considerable time afterwards.
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New Tue 28 Aug 18 14:36 
 Car Insurance Costs - Bromptonaut
There have been a number of well publicised cases recently involving cases where exaggerated claims have been kicked out in their entirety and others where contempt of court has been found.

A few people have been prosecuted for perjury.

The government has introduced a Civil Liability Bill which is intended to (a) cap claims for whiplash and (b) push injury claims worth up to £5k through the small claims track where there is no provision for recovery of legal costs. Justice Minister's press release on bills's publication is here:

www.gov.uk/government/news/justice-secretary-unveils-new-bill-to-cut-car-insurance-premiums

It's controversial with cyclists and pedestrians because, unlike motorists, they are much less likely to have the financial backing of an insurance company and will have to act as 'litigants in person' in such relatively low value claims.

The big insurers are in favour as they think they'll gain more in reduced compo that they'll lose on funding claims with no costs clawback.

Last edited by: Bromptonaut on Tue 28 Aug 18 at 14:37
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New Tue 28 Aug 18 16:48 
 Car Insurance Costs - sooty123
No surprise they've limited it, I think I read somewhere we've got the weakest necks in Europe going by the amount of compo paid on in this country for whiplash. What it's like to claim in Europe I don't know.

I can vouch for it hurting. I got hit from behind I was stationary, car heavily braking thumped into me. Nothing that day thought I'd got away with it, but heavens when I woke up. Near bed bound for several days, just managed to get to drs and get some pain killers. No end of phone calls trying to get me to claim some compo as well.
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New Tue 28 Aug 18 16:48 
 Car Insurance Costs - Shiny
False whiplsh injuries are bigger than ever within the 'community', they don't even do the crash for crashes so much now, they just get a referred call saying if you go to this specific doctor uncle you will get £1200-2500 paid into your bank the next day. So sure of the claim being successful, the bogus injured party doesn't have to wait for a claim to go through. They also ask if they know anyone else up for it and get £300 for each one.
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New Tue 28 Aug 18 17:07 
 Car Insurance Costs - Bromptonaut
>> False whiplsh injuries are bigger than ever within the 'community', they don't even do the
>> crash for crashes so much now, they just get a referred call saying if you
>> go to this specific doctor uncle you will get £1200-2500 paid into your bank the
>> next day. So sure of the claim being successful, the bogus injured party doesn't have
>> to wait for a claim to go through. They also ask if they know anyone
>> else up for it and get £300 for each one.

Not sure I understand this.

I accept, at least for purposes of this debate, that organised whiplash fraud (as opposed to the opportunistic claim farmed sort) may be more prevalent amongst members of various 'communities. They may be from our former colonies or from certain EU countries.

Are you saying there is also an industry which is so certain of the result that it will pay cash first and pursue a (bigger) claim later using the falsified medical evidence?
Last edited by: Bromptonaut on Tue 28 Aug 18 at 17:11
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New Tue 28 Aug 18 17:44 
 Car Insurance Costs - rtj70
I was in a car hit from behind by a tanker lorry (don't know what it was carrying or even if it was full)... I didn't get whiplash.

However, the folded metal of the roof that concertinaed producing a sharp edge cut the back of my head open. Hospital seemed surprised I was only cut but since this was Italy and not the UK I had various X-rays and a CT Scan... In the UK the GP later told me they'd have not done that... probably admit you and observe.
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