Why are motor insurance and Liability rates increasing?
The insurance industry as a whole is reeling from an overhaul of the way courts calculate compensation claims (called the Personal Injury Discount Rate). All motor and liability insurers will probably have to increase the premiums they charge as a result.
If your rate has increased then speak to 1 Stop Insurance Ltd and we can discuss with you what options are available to help reduce your costs if any.
What is the personal injury discount rate?
The Personal Injury Discount Rate, often referred to as the Ogden Rate, is a mechanism used in UK court cases to calculate the amount of compensation awarded following personal injury and fatal accident claims. The discount rate aims to help determine an appropriate lump sum value. The lower the discount rate, the higher the initial settlement insurers must pay out. The rate has been lowered dramatically and this means insurers will pass along the increase to the policyholder.
Why does it matter?
Where a change was anticipated, what has been done is vastly different from what the industry expected. The impact of any change to the discount rate will be significant there is no doubt. It is unlikely to remain static and we believe it will decrease more as time goes by leading to rising costs.
What will happen next?
The probability is that changes to this rate will see insurers increasing their premiums. With rising cost already, due to more uninsured drivers and higher car repair bills it may be a dramatic change. In all likelihood those insurers with lower reserves or operating margins such as “direct writers” will put through the highest increases.
What can you do about it?
If you are an existing client of ours and your premium has increased then rest assured we have already looked at what we can offer. If you are not a client yet then call or email to start the process of analysing. We are pro active in our attention and will secure you the best policy and rates we can from a wide range of trusted insurers.