Personal injury payments in the UK are 17 times higher than in other countries

Large compensation payouts are causing insurance premiums to rise

According to a new report carried out by the RAC Foundation, large compensation claims after a road accident are causing insurance premiums in the UK to rise.
They found that personal injury payments can be up to 17 times higher than in other nations, blamed mainly on bogus whiplash claims, which are quite common in the UK, and a rise in taxes – meaning motorists in Britain are forking out more for their car insurance than drivers in other countries.
Payouts in the UK for long-term care after a person has suffered catastrophic injuries following a road accident can be as high as £10million, compared to Germany and France at £6million in each country. In Sweden on the other hand, compensation payouts can be as low as £600,000.

Large compensation payouts are causing insurance premiums to rise

Personal injury payments in the UK are 17 times higher than in other countries © Copyright Mat Fascione and licensed for reuse under this Creative Commons Licence.

The RAC based their calculations on a hypothetical quadriplegic male, aged 30, with an unemployed partner and two dependent children.
In Scandinavia and other countries, the state as opposed to the insurance company carry the burden when it comes to paying out for long-term care, which does keep the price of premiums lower for motorists.
According to the report, these differences were more than likely going to continue and increase thanks to the Government’s questionable decision to change how injury payouts are calculated.
In the UK, the court calculates compensation payouts based on the cost of care and loss of earnings but also take into account how much payouts should be adjusted based on the possible long-term interest that a victim may earn on the cash.
It’s believed that since 2001, up to 2.5% interest could be earned on compensation, which is looked at when payouts are calculated.
The discount rate was changed earlier in the year to a lower -0.75%, meaning insurers will have to pay out more on the premise that victims will be losing money each year from their payouts.
According to, the cost of an average car insurance policy has increased by nearly 20% over two years from £474 to £562, with young drivers aged between 17 to 19 having to pay on average around £1,322.
Director of the RAC Foundation, Steve Gooding, said: “The nation’s 38 million drivers are all too well aware of the high cost of insurance, and while direct comparisons with the rest of Europe are hard to make, all the signs are that we pay more for our insurance than our continental cousins.”
Mr Gooding also said that everyone should be charged a fair price for their car insurance, otherwise many can be priced out of the market leading to some motorists choosing to drive uninsured, which is a huge risk to all of us.
The Association of British Insurers released figures showing insurance firms had exposed 125,000 dishonest claims last year totalling £1.3billion. Out of these, a staggering 69,000 were found to be false motor insurance claims worth a colossal £780million.
Please click here to find out more about our car leasing services and fantastic deals, or give us a call on 0800 311 8290.

Need some advice on your leasing options?

Complete our enquiry form now and one of our expert advisers will call you back within the hour.