RAC reacts to personal injury compensation Discount Rate change

The Government has cut the 'Ogden' Discount Rate from 2.5% to -0.75% meaning compensation pay-outs in life-changing personal injury cases are expected to rise sharply.

RAC Insurance director Mark Godfrey said: “It is a bizarre decision from the Government to make the first adjustment to the Discount Rate in 16 years at the very same time as they have effectively admitted the current system is flawed by announcing a consultation on finding a better and fairer framework for handling life-changing personal injury pay-outs.

“This move will increase the total amount of compensation awarded in every such case and this will instantly increase the cost of motor insurance premiums as insurers pass on the costs. This will be exacerbated still further in June when another 2% is added to insurance premium tax. The combined effect of this means that motorists are likely to see their premiums increase by 10% and some parts of the market, notably younger and older drivers, may see substantially higher increases.

"Even before this, research for the latest RAC Report on Motoring found that motorists are already feeling the effect of higher premiums with the cost of insurance being ranked as the fifth biggest motoring concern, and now sadly these changes will only make things worse.”

Press office team

Press office team

For journalist enquiries only

Share

Latest stories

Website preview
Pump prices creep back up despite no change in the cost of oil
September sees August price reduction reverse as petrol and diesel rise by a penny
media.rac.co.uk
Website preview
Margins on fuel remain historically high - RAC reaction
Following the publication of the latest road fuel update report from the Competition and Markets Authority, RAC head of policy Simon Williams said:
media.rac.co.uk
Website preview
RAC reacts to latest road casualty data for Great Britain
On average, four people killed and 76 seriously injured on the roads every day
media.rac.co.uk

Get updates in your mailbox

By clicking "Subscribe" I confirm I have read and agree to the Privacy Policy.

About RAC Media Centre

The RAC Media Centre provides journalists and news outlets with the latest motoring-related news, comment, data and research.

The RAC is an iconic UK brand, and provides complete peace of mind to 15 million UK private and business drivers - whatever their motoring needs. As well as its premium nationwide breakdown assistance service – with an expert branded patrol workforce attending more than two million breakdowns every year – and European breakdown assistance products, it offers a wide range of market-leading products across insurance, legal services, vehicle inspections and service, maintenance and repair. Included in this is the first-of-its-kind nationwide Mobile Mechanics service which brings the garage to homes and workplaces. 

At the forefront of new solutions for business fleets and consumers, the RAC’s breakdown service is electric-ready with mobile EV charging technology and be called on using myRAC – its all-in-one route planner, fuel finder and breakdown reporting app

Contact

media.rac.co.uk