Motor Insurance in the UK

Insurance is one of the easiest types of product to sell over the Internet. With no need to be able to see, touch or test it before buying. Strategies for distribution have subsequently changed, which allow for a significant growth in sales over the Internet, which have reduced insurance company costs. In today's market it is estimated that more than 75% of all insurance sales are conducted through the internet either directly or indirectly. Increased competition for the traditional insurers has put pressure on margins as new entrants and the increased cost of rising claims have meant that the insurers struggle to make a profit.

The claim: 

Insurers generally only have 4 methods of settling a claim: 

1. Straight forward replacement on a like for like basis 

2. Re-instatement as to the former condition 

3. Repair as defined by Insurance Assessors / Engineers 

4. Where none of the above are possible, then a financial settlement will be made Before any insurance claim is accepted and the resulting loss paid out by an insurer, it is subject to a process that establishes the circumstances in which the claim arose and adherence to all appropriate terms and conditions - validation. 

When assessing the reason that a motor vehicle claim is made, it is not the final collision, or the actual theft of the vehicle that carries the most weight in terms of apportioning blame, but the event, or series of events leading up to the collision, or theft that must be determined to correctly establish blame. This may require collecting a significant amount of information to establish the most dominant event, in a whole series of events that led up to the loss. The most dominant event in such a series is called the Proximate Cause.

Points of Interest about the UK Motor Insurance Market

Whilst the actual number of motor incidents fell by 4% between 1995 and 2002, the costs of personal injury claims associated with them increased at more than 3 times the rate of inflation in that period. Since 1995 the level of motor vehicle theft has fallen by more than 50% as added security devices in new vehicles have been introduced coupled with a growth in identification techniques for older vehicles.

The 4th EU Motor Insurance Directive (2003) requires details of all insured vehicles to be easily accessed through National information centres, which in the UK, is the Motor Insurance Information Centre (MIIC). It holds all the required details on the Motor Insurance Database (MID). The Motor Insurance Anti-Theft Register holds details of all motor insurance claims registered by UK motor insurers of vehicles that they define as a total loss or write off due to inability to repair to a safe or satisfactory state.