Press release:

Insurers must stomach compensation reforms, says uSwitch

Following the news that Justice Secretary Liz Truss is launching a consultation into the discount rate of the personal injury compensation scheme, new data from uSwitch.com reveals more than four in five consumers (83%) don’t believe insurers should increase the cost of insurance premiums to cover additional costs brought on by the compensation law changes[1]. Nearly three-quarters (70%) also agree that insurers should be responsible for paying the whole compensation sum to the victim of an accident, rather than a reduced rate that accounts for interest earned by investing the pay out[2].

However, with the current reforms meaning car insurance costs could rise by up to £300 for older drivers, three in five (58%) said they don’t think the changes are a good idea[3]. uSwitch is calling on insurers to absorb the cost of these reforms rather than passing them onto customers.

Rod Jones, insurance expert at uSwitch.com, comments: “Insurers must face up to the fact that compensation reform is overdue. The Ministry of Justice is right to protect the rights of claimants seeking full and fair compensation and we hope this latest consultation doesn’t see insurers shirking their responsibilities.

“Let us not forget that insurers have only just won a huge victory on recent whiplash reforms, which is likely to reduce the number of claimants who will receive a pay out. Passing on the cost of the amended discount rate would be a gross example of the insurers having their cake and eating it too.”

Find out how you could save over £1,000 a year with uSwitch here.

 

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Notes to editors

Research carried out online with the uSwitch.com Consumer Opinion Panel between 14.03.17 and 21.03.17 amongst a sample of 2,921 GB adults.

  1. When asked “Do you think insurers should be allowed to increase the cost of insurance premiums to cover this additional cost?”, 82.9% answered “No”
  2. When asked “Should insurers be responsible for paying the whole compensation sum to the victim of an accident?“, 69.6% answered “Yes”
  3. When asked “Do you believe the proposed changes are a good idea”, 58% answered “No”

When answering the questions above, respondents were given the following context:

Recently, the government proposed changes to the compensation rates for victims of car accidents that car insurers pay out in the result of an accident.  Previously, insurers would only have to pay 97.5% of the total compensation fee, as it was assumed the victim would invest part of their compensation to make up for the 2.5% remaining. Now the Ministry of Justice has decided to reduce the discount rate from 2.5% to minus 0.75%. This will result in more money for the victim, but a higher cost for the insurer.

About us

Launched in September 2000, uSwitch is an online and telephone price comparison and switching service, helping consumers get a better deal on gas, electricity, broadband, TV services, mobiles and personal finance products including mortgages, credit cards, car and home insurance. Last year we saved UK consumers over £278 million on their energy bills alone.

Customers can sign up to an account that automatically monitors the energy market and notifies them when they can move to a cheaper tariff, while broadband customers can conduct a speed test to find out how fast their broadband is and identify the best deal for their postcode.

The multi award-winning 'Switching Made Simple' app allows customers to compare energy, broadband, credit card, mobile and SIM-only deals – and uSwitch also has a UK contact centre manned by energy and broadband experts. Customers can post their latest energy bills to FREEPOST USWITCH to receive a free call back and be guided through the comparison process, or they can email customerservices@uswitch.com with their postcode and usage details.

uSwitch is owned by ZPG, which operates some of the UK’s most trusted digital brands that help empower smarter property and household decisions including Zoopla, Money, PrimeLocation and SmartNewHomes.

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