|
I think the crux of the problem lies with Accident Management Companies (ACM). The problem is that the not-at-fault insurer can simply pass the handling of the claim onto an AMC, thus saving themselves the cost of administering the claim and freeing up time to chase new business. The ACM can claim back all their costs from the at-fault insurer and have every incentive to exploit this situation.
The only party with a vested interest in controlling the cost of the claim is the at-fault insurer-and they are not in a position to do so.
This leads to a vicious circle. Insurance companies who use ACM reduce their costs, but increase the overall cost to the industry. Ergo, virtually every insurance company uses ACMs.
My suggestion would be as follows:
1.) Prohibit the use of ACMs. Any company wishing to offer motor insurance must be demonstrate that they are capable of administering claims in-house.
2.) Prohibit credit hire companies from supplying replacement vehicles. Since all insurance companies have to deal with claims, why can't insurance companies share a fleet of pool cars?
3.) Decouple personal injury claims from motor insurance claims. Any claimant wishing to sue for whiplash should do so separately in the small claims court. not just tack it onto a general claim for vehicular damage.
If all the middlemen could be cut out of this industry, then costs would fall without any loss of service to customers.
|
