But claims increased and many weaker players were forced out of the market. The larger groups which emerged are now trying to claw back costs and raise profits. The industry is also having to pay out more money. A sharp rise in the number of law firms specialising in compensation has encouraged accident victims to pursue a record number of claims for record rewards. Recent test cases have increased the amount injury victims can claim.
Payments now take into account future care costs and potential loss of earnings.
The NHS has also been given new powers to charge insurers for treating accident victims, further increasing the companies' costs. As well as shopping around for quotes, the AA recommends keeping the number of drivers on a policy to a minimum, particularly those under 25. The Association of British Drivers said insurers could not shirk all the responsibility for rising premiums. The system is also popular with younger motorists. Associated New Media Ltd. All rights reserved.