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Innocent drivers punished with higher premiums

A toy car on a pile of coinsA Labour MP has called for blameless motorists to be spared increases in their car insurance premiums after they are involved in accidents.

John Woodcock, Labour’s shadow minister for transport, said that the estimated 1 million drivers annually who are involved in accidents which were someone else’s fault should not have to pay a penalty.

Under the current system, drivers involved in collisions where the other party has admitted liability and covered repair costs on their own car insurance can still see their own premiums rise.

Premiums rise

This is because many insurers take into account a customer has been involved in any type of prang – regardless of whether they were responsible or not – when setting premiums.

Some insurers claim that industry statistics show a driver who is involved in an accident, even if it is not their fault, is more likely to crash again.

As a result, this group faces higher motor insurance premiums than would otherwise be the case.

But Labour wants to end this practice.

'Can’t be fair'

Woodcock, MP for Barrow and Furness, said: "Too many motorists whose vehicles get pranged by the reckless driving of others find their insurance premiums rocket as a result – that can’t be fair.

"Hard-pressed responsible drivers deserve a better deal, so Labour will explore the likely effect of banning insurance companies from assessing not-at-fault accidents when setting premiums."

Labour said that around 4.5 million claims were submitted to insurers in 2011, with more than half thought to have involved an accident where only one driver was at fault.

This means that there were likely to be at least 1 million blameless drivers who were the innocent victims in these incidents, but who could have expected their car insurance costs to increase as a result.

Shop around

Insurance experts say that this kind of approach by providers highlights the advantages of shopping around for cover whenever a policy comes up for renewal.

If you have been involved in an accident where the other party was at fault and admitted liability, your current insurer may nonetheless raise your premiums as a result.

By comparing a wide range of quotes, however, you may be able to find a cheaper deal from an insurer which does not hold the accident against you.

Chris Torney

Chris Torney

Chris is the former personal finance editor at the Daily Express. He's been a journalist for more than 10 years and contributes to a wide range of finance and business titles.Read more from Chris

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