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The Insurance Zone Want to insure your ride but not sure of wheres best.. Well, put a post here and others should be able to help!

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Old 02-12-2017, 11:37 AM   #11
MDC250
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Quote:
Originally Posted by Caledoniandream View Post
For the last 4 years I haven’t shopped around, as the quote was fair and none of the extreme increases.

This is how it should be.



Regarding the PI claims there should be a ceiling to the amount to be claimed, it’s still getting out of hand.

The payout should reflect the loss, but should not be a positive benefit, if your prognoses are the you are going to make 1 million in a life time of work, and due to your accident you can only make half of that, than the claimshould reflect that.

I agree with cost for adaptation of cars and house etc, but let be real, no money in the world is going to give your health back.

You shouldn’t lose out, but neither should you gain from your misfortune.

That is how compensation is based now! You are to be put back in the position you would have been but for the accident, injury and resultant losses that flow. In reality for any number of reasons this never happens.

Taking your loss of earnings example you look at what the claimant would have earned during a lifetime, factoring in things like promotion, pension etc. The multiplier or often different multipliers for different periods are applied which reflect investment return over time. So if you earned £20k net and were 40 at the time of loss you do not get £20k x 27 years as it is assumed you can get a rate of return on your lump sum. The figures even include standard mortality rates but if there's anything to you as an individual that would cause that to be departed from bet your bottom dollar the insurer does. Reduced life expectancy means less damages.

The reason insurers are so peed off at the minute is that the discount rate is set at -0.75%. In other words it's assumed you need more than the lump sum in today's money as you will not achieve a rate of return and will 'lose' money year on year.

It's important to put that into context. Firstly, where this really kicks in is for out and out catastrophically injured people. I'm talking tetraplegic, paraplegic, brain injury, spinal cord injury, amputee type claims. Yes in theory this could apply to any injury claim but this is where headline figure type figures are generated. Would you see that type of claimant go short? Secondly the discount rate was previously set for around 16 years at a figure which meant claimants were massively out of pocket and essentially having to 'borrow' from other aspects of their claim to make up shortfall. It's funny how Insurers weren't bleating half as much when they've had it so good for 16 years!!!

Adaptations are recoverable where it's shown they improve the position. Say for example an amputee won't get use out of a £75k hand then it's not recoverable. But if they do why shouldn't they get the best tech they can? It's still not as good as the original but that doesn't mean they should have to put up with the cheapest just to keep an Insurers balance sheet looking healthy.

Again to try and put into context figures for a catastrophic claims often the damages for the pain, suffering and loss of amenity component is often one of the smaller heads of loss. We are talking maybe £300-£320k max. I don't know anybody who would take that money in exchange for the injuries you have to have to get that sort of award. The range of damages are set by senior judges and applied by the Courts so this is not either side of the fence 'getting their way'. Where this become dangerous is politicians interfering in an independent process and it's often under very heavy influence and lobbying from the Association of British Insurers. Let's be clear, the ABI wants its members to pay out less but where does that leave a claimant? Yup reliant on the State that can't actually provide in the first place!

The general public just see the odd rotten apple and the ABI are very good at getting that into the press, who incidentally have a vested interest. Reduction of Legal Aid created an unintended monster in the form of Conditional Fee Agreements (no win, no fee). Reason the press don't like that is they are royally out of pocket when they are sued for libel claims so they have a common interest. So it's a perfect storm...ABI are powerful and rich, politicians are too happy to lend an ear to the powerful and rich who bankroll them and the ABI along with compliant politicians have an ally in the press.

Then we roll out the poor National Health service who are haemorrhaging money in negligence claims. It's wrong that money is going to those injured due to negligent treatment isn't it? Except it isn't as it shouldn't happen to start with in all but extreme cases and more often than not the reason it is, is because the NHS is under resourced and stretched. This feeds into the PI accident claim point above. If you under-compensate that claimant they end up on the doorstep of the NHS!

In summary, don't be fooled by the headlines there's a lot more going on here than the ABI, politicians and press would have you believe. Premiums are high ultimately because it suits and greed drives profit, just ask the shareholders.
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