The activities of claims and accident management are inflating the total cost of UK motor claims to the tune of £1bn, Biba has estimated.
In a statement issued in response to ex-justice secretary Jack Straw’s call for a ban on referral fees, the association says: “The growth of claims management companies/accident management companies has been a significant development in recent years and we estimate they add at least £1 billion to the cost of motor claims in the UK.
“Although these claims management companies can offer important services to help customers with credit hire vehicles and help in pursuing recovery of uninsured losses they have also added a new level of costs, some of which our members believe are exaggerated and unnecessary.”
But the response stops short of backing the ABI’s call for a referral ban, saying that there needs to be a balance between fighting claims inflation and ensuring access to justice.
Biba advocates that brokers should only work with companies that send unsolicited text messages.
It says: “Biba disagrees with the selling of prospect data lists to companies that then send unsolicited text messages which confuse motorists and encourage claims to the market that should perhaps never be there.
“Brokers should avoid claims management companies that buy and sell old claims data or use the brokers previously settled claims and quote data for unsolicited calls or texts. There are several ethical claims management companies that refuse to do this and try to work closely with insurers and the industry.”
It says brokers that refer cases to claims management companies should monitor carefully the developments from the Legal Services Board and the Ministry of Justice.
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