Legal News

Re insurers are concerned that a court ruling could push up cost for underwriters by more than 20 per cent resulting in young drivers paying hundreds of pounds extra to their insurance premiums.
The cost of this 'insurance for insurers' has risen sharply due to a change in the way courts were compensating car crash victims, a report in the Financial Times claimed.
In the past fraudulent whiplash claims were the cause for insurance premiums soaring and being passed on to the customers when there was an increase of 60 percent rise in personal injury claims since 2006.
Last year government ministers pledged to crackdown on ‘trivial’ claims – promising to cut down on the number of whiplash claims and reduce the cost of premiums.
However, brokers providing insurance to insurers were now concerned about the way in which courts were ruling on genuine car crash victims who suffer life changing conditions, such as brain damage or paralyses.
The recent example is of a 17-year-old girl who was awarded a £7.25million payment, plus £270,000 a year for the rest of her life, after an accident left her paralysed.
This now has led to thinking among the insurers about needing to factor in the risk of such payments the costs of which they would pass on to the reinsurers.
Insurers around the world will have renewed the terms of their annual reinsurance policies. Broker Willis Re said that the UK motor sector had been one of the biggest price rises, according to the Financial Time report.
Brokers say that there would be a 3-10 percent premium rise for the policyholders with young motorists facing the biggest increase as they are the group who disproportionately caused more accidents.
The average motor premium fell 7 per cent in the year to the end of June, according to an index-compiled by comparison website, Confused.com.
Following the European Court of Justice ruling that insurers should treat men and women equally now means that young women would also be facing increases in premiums after the ruling comes into force last week.
In the past women paid less for insurance than men due to a risk assessment based on statistics showing they have fewer accidents. The rule change means that young women could now pay £300 more a year to insure their car.