Motor insurance premiums are set to plummet after the government announced a major U-turn on the so-called Ogden rate.
Rethink
Responding to new figures that have apparently come to light, figures revealing, presumably, insurers were none too happy, Juice Secretary David Lidington announced yesterday that HMG has had a bit of rethink on the -0.75% rate his predecessor Lizzy Truss plumped for last year.
Draft legislation placed (for some reason) before a house by J-Sec Dave Lidz indicates that a revised Odgen Rate might be set somewhere in the region of 0 to 1%.
Unclear
When that change might take place remains (like everything else to do with government these days) more than a little unclear. It won’t, Bankstone News understands (to the extent that Bankstone News ever understands anything), be any time before Easter next year.
More disappointingly still, the rate change won’t be retrospective so insurers have little chance of clawing back any funds already splurged on overcompensated long-term injured folks.
Mildly
While MSM encouraged decent ordinary motorists to rejoice at the prospect of falling insurance costs, insures gave the announcement only a very mildly delighted (and by no means altogether surprised) welcome.
A discount somewhere shy of 1% on monies paid to life-changed claimants is clearly no substitute for the ‘2.5% off’ insurers could claim before the late lamented Lizzy T got involved. But in comparison with say, a kick in the teeth, it could perhaps be considered an improvement.
Basket
The key point is that instead of just plucking a number out of the air, HMG has agreed it makes sense to base the rate used on predicted returns on a basket of very unadventurous investment opportunities.
As Gray Truggle of fashion house BIBA has previously observed – in relation to the previous minus rate – you’d have to be stupid as well as long-term injured if you couldn’t invest your money safely without making some kind of a return, however modest!
Need
So all is partially well in the world of insurance compensation again. Now insurance lobbyists just need to get to work on IPT.
Who was Nathaniel Ogden? Click here to learn more.
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