Combatting the problem of uninsured drivers, reducing the number of personal injury claims and better policing are all part of MP David Ward’s car insurance "jigsaw" as he looks to tackle Britain’s escalating premium problem.
Liberal Democrat MP for Bradford East, David Ward, has launched a campaign to bring car insurance costs down after he was contacted by a number of his constituents who faced soaring annual motor premiums – in some cases as high as £53,000.
After contacting 15,000 residents with a survey Ward and his team compiled a report called ‘It can’t go on like this’. Now he’s taking his campaign to Parliament in an attempt to overhaul the insurance industry.
Why is Bradford an insurance black hole?
Across the UK, drivers have suffered a rise of 40.1 per cent in the last year, taking the price of an average annual comprehensive policy to £892. (See how much your car insurance has risen in the last year here.)
But in Bradford car insurance prices have risen by 62.6 per cent since 2009, making it Britain’s most expensive car insurance area.
Ward explains: “We were approached by some people who were given outrageous quotes. Clearly, because of where they lived, the insurance company did not want to insure them. We felt we had to find out more about the situation.”
Uninsured drivers vs. personal injury claims
Uninsured drivers have been blamed for escalating costs nationwide and the Association of British Insurers (ABI) say they add up to £40 to the cost of premiums. In Bradford, the concentration of uninsured drivers is higher than anywhere else in the UK.
“We call it the ‘BD3 problem’. We have one postcode in particular that has become infamous as top of the league for uninsured drivers. It infects other parts of the district so law-abiding motorists are paying for others dishonesty,” explains Ward.
But Ward believes that Britain’s claims culture is a bigger problem than motorists driving without adequate cover.
“We found that, despite the focus on uninsured drivers, people were more concerned about personal injury claims.
“Many people are paying what they consider to be unfair premiums, so they’re much more tempted to put a claim in.
“What we have is a situation where accident rates are actually falling, so it’s not as though more people are going out and crashing, they’re just claiming more for them. You can understand why they do it: they feel no moral obligation.”
No easy fix
Ward says the solution is not an “easy fix” and that several contributing factors need to be addressed to tackle soaring premiums.
“Sorting this out is a big jigsaw. There are short-term and-long term solutions.
“One of the easier things to fix is the referral fees issue. That can be stopped with legislation.”
Former justice secretary Jack Straw condemned the referral fee system last month and the Ministry of Justice has since announced plans to ban these fees altogether.
This is the practice whereby insurers and other parties in the claims and accident process, such as garages and the police, pass customer details on to lawyers to generate more claims.
Although Ward is supporting a total ban on these fees, he says it’s just one part of the solution.
More help for police
High on Ward’s agenda is helping police catch uninsured drivers. He says the police in Bradford are aware of high levels of fraud but do not have the tools and resources to deal with it and it's a problem that’s likely to be common elsewhere.
“At the moment something like three out of 16 police cars can detect uninsured drivers,” he says. “The government should pay into this. Providing police with the technology would be a way of driving down the number of uninsured drivers.”
Young and high risk drivers
There’s also plenty of debate surrounding the need to provide better training for new drivers.
Ward says: “We need to do something to offer better training particularly in the first crucial 12 months on the road, whether that means overhauling the license system or some sort of probation period.
"We’ll be working with driving instructors to help young and inexperienced drivers.”
As well as supporting Jack Straw’s bill for a ban on referral fees, Ward is going back to his constituents in Bradford to form a working group.
This will include representatives from the police, the Association of British Insurers, driving instructors and insurance brokers.
“We need a local strategy as well as a national one, we can’t just sit and do nothing. We’ll cover it from all angles and go back to Westminster to see what we can do.”