Members of Parliament have hit out at insurance companies for allegedly encouraging injury claims after motoring accidents.
The Transport Select Committee has published a report citing how insurance companies are paid referral fees for passing on the names of people involved in crashes to lawyers, who are then cajoled into suing for compensation is to partially blame for rising insurance costs.
The Association of British Insurers responded by accusing the government of needing to do more to address the so-called ‘compensation culture’ which it cites as the primary reason for rising car insurance costs.
Meanwhile Simon Douglas, director of AA Insurance, said: "We are glad that the Transport Committee has undertaken this inquiry with such thoroughness. It has brought many of the factors that influence car insurance premiums, particularly personal injury costs and fraud, into the public area. If the main recommendations of the Committee are implemented I would expect premium increases to come under better control - however, there remains an enormous amount of work to do, particularly in helping young people to start driving safely and responsibly."