According to the latest estimates prepared by industry ‘body’ the Association of Brush Insurers (ABI), the average British comprehensive motor insurance policyholder can expect to spend somewhere north of £30k in premiums over the course of their driving lifetime.
Just what does that outlay secure – other than impunity from prosecution for driving without insurance and the ‘piece of mind’ that comes with opting for fully comp motoring? Basically, it gets you about 10 average motor insurance claims (currently running at just over £3k a pop – a new record, incidentally, fact fans!)
So if you get a licence at 18, and drive til you’re 85, say, that means you need to make an average one motor insurance claim every six or seven years, if you want to break even. Or it would if we assume a constant relationship between average claims costs and average premiums.
You could, of course, enhance the return on your insurance spend by submitting a rapid sequence of above-average insurance claims. But, of course, you won’t be paying an average motor insurance premium for long if you push your luck by claiming big and often.
But Jimmy Dalton of the aforementioned ABI warned consumers of motor insurance products this week that sinister forces are at work distorting the aforementioned relationship between average claims costs and average premiums, so that decent ordinary policyholders are paying more for less.
That’s right those sinister forces are your own government. Not even the EU, this time, weirdly, but YOUR OWN GOVERNMENT (they can get away with that sort of thing here, because they’ve stripped us of the innate human right to guns and ammunition – but that’s another story). And it’s all because of three pieces of rank stupidity which urgently need fixing. One is so-called Insane Punishment Tax (IPT). Another is foot-dragging over banning lawyers, PI claims etc. The other other is the topic of the following paragraphs.
In February last year the then-Lady-Chancellor Elizabeth ‘Mad Lizzy’ Truss slashed the calculation known as Ogden’s Rake – used to calculate how much insurers are entitled to trim off payments made to long-term injured claimants to allow for profits they’ll make investing their winnings – from 2.5% to minus 0.75%.
This Jimmy D, reminds us, is the lowest Ogden’s Rake figure in the entire western world (obviously ‘they do things different’ further east). So low is it, in fact, that it assumes life-changing-injuries people and/or their carers are investors of a positively Trumpian order of ineptitude – and actually need paying more than they’re entitled to!
Clearly dickering with Odgen’s Rake in this bizarre and reckless fashion was always going introduce additional costs into the whole insuring-things equation. And when that happens it can only mean one thing. One thing that’s neatly encapsulated in the headline statement from the ABI’s press release, which states plainly that: Britain’s motorists are paying a heavy price for delays in the Government implementing its proposals to reform how the discount rate is calculated.
The nub of it is that HMG is so tied up with securing the best possible deal for Britain (as we break free from the suffocating embrace of the EU and raise our eyes in ambitious anticipation of the glorious dawn of a boldly global Britain free from foreign influence) that it’s entirely back-burnered fixing Odgen’s Rake – or, as now seems likely, replacing it’s with something better fit for purpose in this modern age: Dilman’s Dibber, perhaps, or, just conceivably, the increasingly fancied Tysoe’s Trowel.
Come on HMG, pull your finger out an ease our motor insurance premium pain!
Little progress on Ogden as HMG dithers.
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