Magazine article The Spectator

Beware the Vultures

Magazine article The Spectator

Beware the Vultures

Article excerpt

The imminence of paying for a 17-year-old to learn to drive brings with it the unwelcome question of insurance. Rather more welcome is recent publicity about insurance revealing yet another conspiracy against the consumer.

Some premiums have jumped by up to 40 per cent. The reason usually given - uninsured drivers for whom we all end up paying - is only part of the story, and not the major one. That honour goes to the automotive ambulance-chasers, the scam whereby accident management companies and credit hire operators are in league with insurance brokers - all three sometimes owned by the same private equity company. They take over the processing of your claim, encourage you to quote whiplash or any other injury that's hard to confirm and hire you a car while yours is off the road. The hire car and the time taken to repair yours are often neither the cheapest nor shortest possible. The bill is supposed to be paid for by the other party's insurance company (which means us, ultimately), but you might be unpleasantly surprised to find that the other party's insurers refuse to pay for the expensive credit hire so that the costs then fall upon your insurers, pushing your next premium through the roof.

How do these vultures get on to you?

Usually because insurers - not necessarily your own - sell them your details. They also do random cold-calling. I've twice been texted by lawyers promising to win me £3,000 if I would let them have details of any accident I'd been involved in. Such practices have been well aired in the motoring press but broke through to national consciousness only when taken to the Today programme by a public figure, the former home and foreign secretary, Jack Straw. There is now the prospect of government action to restrict the practice, even if it doesn't expunge it, not least by tackling no-win-no-fee lawyers. But don't bet the farm on your premiums coming down any time soon.

All this, of course, feeds into the sky-high premiums that young drivers now have to pay. When I had my first car - a 1955 Ford Popular - insurance was a bearable burden, with the major cost the car itself (£40).

Now it's often the other way round; a friend is paying £2,500 to insure her 17-year-old to drive his £1,000 Renault. So, what does the cash-strapped parent do?

Most won't do what my father did: lend me the money which I repaid by hedging and ditching fields. …

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