Government Measures to Drive Down the Cost of Motoring

govt measuresThe government has announced a raft of measures aimed at cutting the cost of motoring. Quoteline Direct looks at what they have got planned and asks whether their figures really add-up.

Motorists have been having a tough time of it recently so any help from the government is welcome and the latest round of pledges should make a real difference, although some more than others.

As an insurance broker we’re most interested in the crackdown on whiplash fraud, which should have the biggest impact. Regular readers will know that the UK has earned the unfortunate nickname as the whiplash fraud capital of Europe costing the industry an estimated £2billion a year and adding £80 to the price of every policy.

Malcolm Tarling, of the Association of British Insurers, neatly sums-up the problem: “Around 78% of all injury claims following an accident in the UK are for purported whiplash; that’s twice the average of other European countries. So we have either got the weakest necks in Europe or there’s a ‘have a go’ attitude towards compensation culture that’s fuelling claims”.

Diagnosing whiplash is tricky business which until now had often been left up to ‘interested parties’. However, that’s all set to change as Justice Secretary Chris Grayling explains:

“Claims are now going to be assessed by an independent doctor. At present it’s the claims management companies and solicitors who arrange the medical investigations, but we want them to be completely independent so we know genuinely whether people have been injured or not. We think that will put an end to fraudulent claims and will help bring down insurance premiums”

It’s a smart move and one that’s been widely welcomed by the insurance industry. Earlier in the year the government introduced legislation that put an end to the payment referral fees that encouraged ‘ambulance chasing’. The move saw average premiums drop by £80 and the latest measures are anticipated to have a similar effect.

Besides tackling whiplash fraud the government is planning a scheme to cut the cost of fuel at motorway service stations. The plan is to trial road signs that clearly display the price of fuel thereby allowing motorists to compare costs and encourage competition between service stations. It’s also worth remembering that the government has previously pledged to freeze fuel duty until the end of parliament.

The final measure is to place a ceiling of £54.85 on the price of MOT tests until 2015. With competition already rife it’s easy enough to find cheaper MOTs, but as they say ‘every little helps’.

At Quoteline Direct we will be keeping a close eye on how the proposals stack-up and fingers crossed we will be able to report some more good news in the coming months.

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