Are insurance referral fees a racket?

[5corpio]

Are insurance referral fees a racket?

Amid the recent publicity about legal referral fees relating to car insurance claims, there has been more heat than light. Critics of the practice, such as Jack Straw MP, have described it as a "racket" and a "dirty little secret".

In theory it should be neither. The referrals system is essentially another way for law firms to market their services. But it remains intensely controversial, and the government has pledged to reform it.

How does the system work?
The principle is simple - a law firm agrees to pay a fee in return for being passed the contact details of someone who might be interested in their services. The deals are usually between lawyers and insurance companies, but estate agents and trade unions often refer their customers onto law firms too.

Law firms will pay up to several hundred pounds when someone who has been referred to them goes on to

Read more on this story: BBC News - Are insurance referral fees a racket?

[IF]

Re: Are insurance referral fees a racket?

Just moved to its own thread Scorpio xx

[5corpio]

Re: Are insurance referral fees a racket?

Just moved to its own thread Scorpio xx

i just added it to the previous thread, rather than create a New one, likely chance that i would be posting something else on newly created one, that was all
Thanks If...

[charitynjw]

Re: Are insurance referral fees a racket?

Perhaps the most unpalatable part is that the Insurance Co's then complain about the number of claims for injuries such as whiplash, & use this as an excuse to push up premiums (Allegedly!!).

So it's win-win!

[CleverClogs (RIP)]

Re: Are insurance referral fees a racket?

Are insurance referral fees a racket?

[lookingforward]

Re: Are insurance referral fees a racket?

Bloody insurance companies.
Needed to get my old 1.6 M reg car fixed at a garage was going to cost £250+ so not worth it. Managed to p/x at a local dealers for a 1.4 2002 plate Rover.
Great I thought, should be cheaper as smaller engine. Oh no premium goes up PLUS they charged £55.00 admin fee for the privelege (was in T&C's) !! Basically they got the new quote whilst I was on the phone and emailed me the new policy £55.00 !!
Will be looking around come Dec when it runs out that's for sure.

Haven't changed car during term for years but I'm pretty certain there never used to be admin fees.

[MustGetStraigh]

Re: Are insurance referral fees a racket?

Veering slightly OT... I changed car in January. Fully expected to have an increased premium but when I rang my insurers, was told no problem, did change of car details, no charge. No increase in premium (which isn't due til November). Have to say that really impressed me, especially since I'm pretty darn sure the replacement car is a higher insurance bracket than the old one.

[CleverClogs (RIP)]

Re: Are insurance referral fees a racket?

Veering slightly OT... I changed car in January. Fully expected to have an increased premium but when I rang my insurers, was told no problem, did change of car details, no charge. No increase in premium (which isn't due til November). Have to say that really impressed me, especially since I'm pretty darn sure the replacement car is a higher insurance bracket than the old one.

When the numpties work that out, you'll probably find that you're uninsured.

[MustGetStraigh]

Re: Are insurance referral fees a racket?

When the numpties work that out, you'll probably find that you're uninsured.

They have all details of the car, and I've got confirmation of cover so I can't see how they can wriggle out ... but you can bet the premium will hike up in November.

[CleverClogs (RIP)]

Re: Are insurance referral fees a racket?

They have all details of the car, and I've got confirmation of cover so I can't see how they can wriggle out ... but you can bet the premium will hike up in November.

Other people have received confirmation of cover or a "cover note", only to find when pulled over by the plods that their details had not been entered correctly - or at all - on the insurance company's computer.

All that the Road Traffic Act requires is that one should either be insured for third party damage(s) or that one (or one's employer) should have lodged the currently appropriate surety with the Paymaster General of the Supreme Court. Whilst it is quite possible to understand how a motor car driver might, due to poor visibility, utterly spoil a child by running over it with a steam roller, it is less easy to comprehend why one's insurance should be hiked when one changes models of motor car.

[charitynjw]

Re: Are insurance referral fees a racket?

Several years ago, using my own car for my then employer's business (with appropriate recompence), I insured fully comp + extras, for business & private use (inc windscreen cover which didn't affect 'no claims') via a well-established insurance co. (Naming them here wouldn't GAin anything!)

Driving back from work one day, a stone hit the screen - crraaaack!!

Ins co said 'Ok, just pay for replacement, send us a copy of the invoice, & we will reimburse'

I then received a letter stating that I was not covered for business use!!

I finally found that, because I had been entitled to a discount via my employer (some sort of perk), the eejit at the insurance co who had inputted my details didn't comprehend the discount, unilaterally decided that the cover must be for private use only, & had taken it upon him/herself to alter the contract details!!

No problem, I thought, once I explained to the ins co that it was their error, all would be rectified.

Not a chance - apparently it was my fault - I should have noticed the error & informed them. No amount of reasoning would move them from their stance.

That was many years ago. They have probably by now managed to extract my policy from where I told them to file it!

[5corpio]

Re: Are insurance referral fees a racket?

OFT issues call for evidence on motor insurance

The OFT today issued a call for evidence to establish the background to recent reports of rising UK private motor insurance premiums, and..... Read more on this story at the Forum news pages