The Madness of Insurance.

An announcement from the High Court reversed an earlier decision against RSA Insurance, which paves the way for insurers to inflate repair charges by at least 25%.

In short it was initially deemed that the cost of repairs should be determined by what an individual would pay for their own repairs.

The madness is that because many Insurers use their own preferred repair shops who charge them discounted rates, these may stay the same but the cost of the claim will now rise because the repairs will be based as if someone had asked for them personally. 

In other words claims will not go down but up and though RSA has possibly secured its victory for the charges it levied for repairs, it may find itself with extra costs by parties claiming against RSA.

I hope you kept up with that, in short it means the idea of motor rates coming down after the large increases over the last two year looks less likely now than ever. 

For the life of me I can’t see what benefit RSA thinks they have secured, all I can feel is that it's somewhat hollow because it may well come back and kick them in the teeth.

What is important regardless is that if you are involved in an accident, and are obliged to use the Insurers repair shops, independently check what the repairs would cost and make a formal complaint if you’re not happy. I’m not saying it will work but it can’t hurt. Unfortunately there seems to be no directory of who is renowned for higher repair charges, because that is a factor that we would use when comparing prices before the policy is taken out. 

Yes, complaining to a big company is a nightmare but it’s your money paying the premium, so the lower the cost of an accident the less harsh the Insurer may be at the point of renewal.

The RSA result of the High Court case looks like (apologies for the pun) an accident waiting to happen, insofar as being picked up by MP’s and yet another occasion where Insurers may have unwittingly shot themselves in the foot.