Insurers are under-reserving for personal injury claims, according to a new survey released by the Accident Group.

Fewer than one in five people are aware that legal aid is not available for the majority of claims, in spite of the fact that funding was withdrawn in April last year.

Managing director of legal expenses insurer DAS, Paul Asplin, said: “There are more claims out there that people are not pursuing, although advertising by companies such as Claims Direct is raising awareness.

“Insurers need to be wary about how they set reserves, as some may have to go back three or four years to reopen claims they thought were dead and buried.”

Only 17% of the 2,000 adults surveyed were aware that legal aid had been withdrawn, while a further 46% thought they were entitled to legal aid but did not know how much financial support they would get.

People aged 25 to 44 were the most “accident-savvy”, the survey found.

There are already hundreds of personal injury cases backlogged in the legal system, as insurers and claimants wrangle over the level of premiums recoverable.

A decision was made by the judge in Callery vs Gray that the level of premium in the case – £350 – was reasonable, although this is at the bottom of rates being charged. Other insurers, such as Claims Direct, are charging upwards of £1,200.