Insurers prefer legal costs to paying out claims

YOUR story “Insurance customers ‘pay price for huge legal fees’” (Yorkshire Post, February 23) merits a response.

There is really no need for any insurance company ever to pay out any but the most modest legal fees.

If an injury claim is a bad one then these days, since it is all on “no win, no fee” terms, there will be nothing to pay (in fact no such claim will ever be brought for that reason).

If it is a good claim, all the insurer has to do is agree to pay a fair amount for a fair claim right away, and the legal fees will be minimal.

By definition therefore, larger payouts for legal fees only arise when insurers resist paying out (or paying enough) on fair claims. And that is entirely their own fault. The truth is that insurance companies like to be profit maximisers.

They aim to take in as much as possible in premiums and pay out as little as possible in claims.

So even reasonable claims are systematically resisted; for all their carping about legal fees, they must have decided its cheaper to pay them than pay the claims!

This is not to say that claimants’ lawyers are perfect. There are certainly one or two I would like to shoot.

But let us be very clear about what the insurance industry is about. They don’t mind legal fees, that is why they spend so much on them.

What they object to is being forced to pay the compensation that the premiums are paid for in the first place.

Now that really is what I would call insurance fraud.