Jack Straw calls for complete reform of motor insurance industry
BLACKBURN MP Jack Straw said he would ‘not rest’ until there had been a complete reform of the motor insurance industry.
Last year Mr Straw revealed the industry’s ‘dirty secret’ – that companies themselves were selling on clients’ details to personal injury firms for between £200 and £1,000 a time – was to blame for rocketing motor insurance premiums in East Lancashire.
The MP’s findings inspired a campaign for referral fees to be outlawed; the no-win-no-fee system overhauled; the law on whiplash damages changed to require a stricter burden of proof; a clampdown on the trade in personal data; and tighter regulations of claims companies.
Yesterday, a report on the cost of motor insurance by the Transport Select Committee supported a number of Mr Straw’s calls, but said referral fees should not be banned altogether.
Stepping up his campaign, Mr Straw said: “The reason I am on to this is because of complaints from members of all the community in Blackburn about the high level of insurance premiums, and the fact that for young people, it is sometimes impossible to get insurance at all, except for ridiculous costs, which are pricing them out of the market.
“Recently I had a case where a lady was in the Tesco car park and, as can happen, she put it in reverse by mistake and went into the back of the car behind her.
“She had only moved two yards, so she hadn’t got up to speed, but she slightly damaged the other guy’s bumper.
“She said she would pay and exchanged details with the guy to avoid going through the insur-ance companies, but the next thing she received letters from three firms of solicitors saying there were four occupants in the car and that they were all suing for whiplash.
“She has actually settled in one of the cases.
“According to the data, people in the North West have much weaker necks than people in the South of England and Scotland, which is just ridiculous.
“The whole series is an interlinked racket, and the insurance companies know this is the case. I’m not going to rest until it is sorted.”
Following Mr Straw’s comments on national radio, thousands of people lent their support through social networking site, Twitter.
Nick Starling, director of general insurance at the Association of British Insurers, said: “Referral fees should be banned altogether and not made more transparent – and that ban should apply to all organis-ations receiving them, not just insurers.”