Time was that when you had a car accident, you informed your insurance company, they got in touch with the insurance company on the other side, and the whole matter was sorted out with very little need for anything else.
But road traffic accidents have become a veritable industry in themselves because there is so much money sloshing around. Satellite organisations have grown up to service the claims, always at a price. This in turn has steadily pushed up the costs of insuring a car.
The first newcomers on the scene were the credit hire companies. These offer to supply a courtesy car but at a premium over normal hire rates. They justify this by saying that they offer a service by relieving the customer of the need to go out and find a suitable car. The cost of the credit hire is then claimed from the insurance company of the driver who caused the accident. This in turn leads to disputes as to whether credit hire was necessary, the length of the period of hire, and ancillary items charged as part of the hire cost.
It is not unusual for the amount of credit hire to exceed the value of the damaged vehicle by many times; further, claims into six figures are not unknown. Result – court resources and litigation costs incurred.
Then there are the ‘claims farmers’ who, for a fee, seek out the claims and pass them on to others to service. As has been reported in The Times, it is not usual for drivers to receive solicitations for business on the basis that they have been involved in an accident, whether they have actually been involved in an accident or not!
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To the list must be added solicitors who pay referral fees to insurance companies to pass on details of their policyholders so that the solicitors may approach them for their custom; a practice with which the former Lord Chancellor, Jack Straw, has some serious issues.
And don’t forget the engineers who carry out reports on the damage to vehicles, for which they charge a fee. Previously it was sufficient for the repairing garage to prepare the report for no fee on the basis that they would be carrying out the work themselves.
Last, but not least, we have the new kids on the block – the repairs managers. They arrange for the repairs to be carried out, often by unnamed garages, and then present an account for the cost of repairs, including, of course, their own management fee.
So next time you moan about the cost of car insurance, remember: there is a large family to be fed.
Stephen Gerlis is a District Judge at Barnet County Court