Third-Party Claims Inflation Hitting Cover Cost
- Created: 16 December 2019
The impact of third-party claims inflation on van insurance has been marked over the past decade and the situation may only get worse, according to experts within the industry.
This comes despite, or perhaps even because, of the advent of the credit hire and credit repair and personal injury service industry, which together have served to increase costs for many van insurance policyholders.
“Third-party claims inflation has been going through the roof for the past 10 years and it’s not really getting any better,” Glen Eastwood, the managing director of legal expenses firm MSL, recently told a motor claims costs conference.
Likening the the credit hire industry’s appearance on the motor insurance landscape twenty years ago to the arrival of a “knight in shining armour”, Eastwood said that its intervention in non-fault third party claims has proved to be something of a poisoned chalice.
However, he said that intervention should be considered as a positive act, but only if it is managed cost-effectively. Early offers to non-fault third parties were useful, he said, because they offer the potential to “save between £2,000 and £3,000 per claimant.”
In an environment where a non-fault third-party is seen as a commodity, Eastwood outlined, the key is to take the initiative by acting quickly and offering your services on a direct basis.
“Intervention is a really key element of good claims handling,” said Eastwood, “if you want to reduce your third-party spend, you have to be doing this and you have to do it well.”
The key to ensuring costs remain low is to ensure that the whole process is managed correctly – for example, that early intervention offers are reasonably valued and that everyone is notified at the earliest possible stage, this includes brokers, who are often notified far too late for offers to prove effective.
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