Car insurance: Chancellor vows action on compensation rates

Car insurance: Chancellor vows action on compensation rates

Chancellor Philip Hammond has said the government will "urgently" consult on future changes to compensation rates.

Insurers have warned that car insurance premiums could "soar" as a result of changes next month to the formula for calculating personal injury payments.

Mr Hammond met insurance bosses on Tuesday to discuss the changes.

In a joint statement with the industry afterwards, the Chancellor said the system must be "fair" to claimants as well as other drivers.

"The government will progress urgently with a consultation on the framework for setting future rates, and bring forward any necessary legislation at an early stage," Mr Hammond said.


However, he did not commit to making changes to the formula before it comes into force next month.

Mr Hammond met chief executives and other senior executives from 15 major insurance firms, including Aviva, Direct Line and Admiral.

Ahead of the meeting, the Association of British Insurers (ABI) said it would urge the chancellor to block the new formula before it kicks in on 20 March.

The ABI said the "crazy" change could increase car insurance premiums for young drivers by up to ?1,000 a year.

The reaction of the insurance industry has been overwhelmingly negative, with some insurers saying that profits would be hit by hundreds of millions of pounds.

Aviva became the latest insurance firm to warn of a hit on Tuesday, saying the change would cost it ?385m in profit.

However, lawyers who campaigned in favour of the change said it was "long overdue".

Accident victims are set to benefit as they will receive higher pay-outs under the Ministry of Justice's new formula.



Add Comment

all comments

  Other news

more
Katie Price shows two-year-old daughter Bunny topless photos of herself  in a clip from her new show My Crazy Life

Katie Price shows two-year-old daughter Bunny topless photos of herself in a clip from her..

23-Jun, 15:50

And the mum of fives series lives up to the title. In scenes yet to air,...

Uber sued by rider who says she was groped by driver

Uber sued by rider who says she was groped by driver..

22-Jun, 19:36

Attorney Lisa Bloom, left, and Erica Holland, who is suing Uber after a...

Tipping points are real: Gradual changes in CO2 levels can induce abrupt climate changes

Tipping points are real: Gradual changes in CO2 levels can induce abrupt climate changes..

23-Jun, 11:06

During the last glacial period, within only a few decades the influence...

TOWIEs Mario Falcone has 'best week of his life' while fiancee Becky Miesner shows off massive engagement ring

TOWIEs Mario Falcone has 'best week of his life' while fiancee Becky Miesner shows off..

23-Jun, 14:42

And it seems the TOWIE star is still celebrating his happy news, after he...

Why Trump tax cut may not deliver the boost White House says

Why Trump tax cut may not deliver the boost White House says..

27-Apr, 00:18

President Donald Trump's team boasted Wednesday that its tax-cut plan...

Netanyahu: Trump 'sent strong message' with Syria strikes

Netanyahu: Trump 'sent strong message' with Syria strikes..

07-Apr, 00:16

Just hours after the United States launched a military strike on an...

Workers Contributing More to, Borrowing Less From 401(k)s

Workers Contributing More to, Borrowing Less From 401(k)s..

02-Feb, 06:16

A rare doubleshot of encouraging news on retirement savings: Workers are...

Sawan Biang (????????????) Episode 12

Sawan Biang (????????????) Episode 12..

18-Feb, 04:00

The following Sawan Biang (????????????) Episode 12 English Sub has been...