Compensation culture 'raising car insurance premiums'

Compensation culture is partly to blame for a record rise in car insurance premiums in the last year, the AA has said.

Personal injury claims were becoming "increasingly embedded in British culture" often as a result of lawyers' adverts, it claimed. The typical annual comprehensive car insurance premium rose 18.7% in 2009 to above £1,000, the AA's figures show. That was the biggest jump since the index started in 1994.

Simon Douglas, director of AA Insurance, said that insurers had been struggling to deal with disappearing reserves at a time when settlement costs and personal injury claims had risen. "Many people seem willing to pursue claims for even minor injuries, such as mild whiplash pain that in the past they would not have bothered claiming for," he said. "This is encouraged by personal injury claims lawyers whose marketing urges people to make claims and whose costs, as well as compensation for the claim, are met by the third party insurer. This is becoming increasingly embedded in British culture and, ultimately, feeds back to premiums."

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source: BBC