AA urges Cameron to ‘kill compensation culture’

The government should focus on stamping out compensation culture in its efforts to prevent rising motor premiums, the AA says.

The comments come as Prime Minister David Cameron prepares to meet insurers this afternoon to discuss how to tackle rising motor premiums fuelled by bodily injury claims inflation.

“I believe that the insurance industry is committed to keeping premiums as competitive as possible,” AA Insurance’s director Simon Douglas said in a statement. “But as the gap between premium income and claims payments has widened because of soaring fraud and personal injury claim costs, premiums have had to rise for everyone.”

According to the AA’s British Insurance Premium Index, the average Shoparound quoted premium for a comprehensive car insurance policy rose by 15% over 2011 and by 33.2% over 2010.

The AA says it has already provided evidence to enquiries by the Transport Committee and Office of Fair Trading into rising motor premiums.

The company says it has consistently called on the government to control the proliferation of personal injury and accident management companies encouraging people to make claims; ban personal injury law and accident management firms from cold-call advertising; and overhaul young driver training.

Douglas added: “I’m pleased that Mr Cameron has chosen to highlight the issues in this way. It shows that the government is taking fast-rising premiums seriously and wants to find ways to control costs such as personal injury claims and fraud which have been the main drivers or rising premiums.”

Douglas also welcomed Cameron’s interest in telematics to help young drivers reduce their insurance costs.