Motorists are facing higher insurance premiums even though the industry is saving millions of pounds thanks to the Government imposing curbs on whiplash claims.
Drivers have seen the cost of insuring their cars rise by nearly 20 per cent.
But at the same time the insurance industry has saved around £520million because of a dramatic drop in personal injury claims, The Times reported.
It is estimated that the number of personal injury claims has fallen by 23,000 since the changes were introduced by the Cameron administration.
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When the changes were introduced insurers pledged to pass on the savings, estimated by ministers at £50 a year, to motorists.
But the latest analysis of the cost of motor insurance has told a very different story.
According to confused.com motor insurance policies have risen by 19 per cent over the past year, while the Association of British Insurers (ABI) estimated that drivers are paying 10 per cent more than a year ago.
However, the ABI denied insurers had been profiteering. Rob Cummings, the ABI’s general insurance manager, said that around £1.1 billion had initially been passed on to motorists.
The former prime minister introduced the reforms following a Downing Street summit in 2012, when he was told by the Association of British Insurers that whiplash claims were adding £90 to annual premiums.
Ministers banned referral fees and placed limits on the amount paid to lawyers for handling cases.
In an attempt to cut the legal bill further, the Government also raised the personal injury threshold for small claims courts from £1,000 to £5,000.
It also ended victims’ rights to claim cash payments, with insurers only being obliged to pay for medical rehabilitation.
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This, he said, was twice as much as the industry had saved, which in turn had led to insurers trying to recoup some of that money.