As we approach the end of the year, thoughts inevitably turn to the biggest challenges and opportunities in the new year ahead. Recent meetings with our broker partners have served as a catalyst to this process of reflection and prediction for me. In particular, how can we exceed expectations in terms of fair value and service?

I also feel I have a responsibility as an insurance leader to help deliver peace of mind to the people we serve.

Many of your clients are without valuable peace of mind right now

The whiplash reforms have created true reform. As you may have noticed all the nuisance calls asking if you’ve been injured have stopped, thank goodness. This is because the whiplash reforms removed legal cost associated with what was predicted to be 90% of personal injury claims and this was the revenue that was supporting the “after the event” claims management companies (ambulance chasers), so they have vanished.

However, the vacuum left behind means many motorists are now left without a claims service they desperately need when they or their passengers are injured in a road traffic accident and many brokers are not always aware that their clients need their help.

There are approximately 23,000 injured parties trying to use the government portal (OIC) each month, less than half the pre reforms figure. However, of those trying to use the portal without help only a third currently make it through to a settlement. This means that thousands of injured motorists don’t receive any compensation.

What does quality legal expenses cover look like?

Brokers can give their clients protection and peace of mind with a motor legal expenses policy that covers personal injury claims. This add on will fund their clients’ injury claims via the portal or via litigation to ensure that whatever happens they are properly compensated.

BUT the story does not end there and sadly things aren’t always so black and white. Brokers must beware of cheap imitations.

Some insurers of add-ons will exclude certain injuries – particularly the lower value and often more common injuries, so beware that trap. Ensure you provide add-on legal expenses that covers ALL injuries.

Also, there are still some claims companies in the market clinging to the past, trying to provide brokers with legal expenses schemes subsidised by claims derived income e.g credit hire. Their problem is twofold, without the significant pre-reform revenue from personal injury claims they are

not able to support the same level of service and they no longer have an eager panel of personal injury lawyers waiting to take all their claims on. I am seeing this lead to some of the old Wild West antics of the past, with Personal Injury cover being stripped out of motor legal expenses policies, for example. This means the policies they offer and the service they provide have limited if no value.

Bring price and value into alignment

Yes, it means they can continue to provide a policy as cheap as possible, but also makes it pretty much useless to the client, from a consumer duty perspective. At renewal notifications of reduced cover, and fair value of a limited product have to be made clear to the consumer. When they claim, clients are either left to try and navigate the OIC system alone or worse still in the case of serious injuries having to hand over a big chunk of their damages to some lawyer retained on an after the event agreement. There is simply no substitute in a post reform world for a quality stand-alone legal expenses policy at an appropriate and proportionate price point.

Alps has been established for 25 years providing add ons and claims service to brokers. We have always done the right thing for our brokers and their clients. We did not entertain the ATE market during those crazy compensation culture years. We continued to support our brokers with proper add ons and dealt with their clients’ claims within our legal practice so that they kept all of their damages.

Before the reforms our PI claims services were funded by legal fees. Now, without those fees our service is funded by our motor legal expenses add on. Quality cover at the right price.

It has never been more important for brokers to ensure that their clients have a proper motor legal expenses add on that cover all types or injury claims. Please beware of cheap imitations!

Please feel free to get in touch in you have any concerns about your own motor add on situation.