Coplus the Norwich based Legal Expenses Insurance provider has published a guide to enable brokers and insurers to be fully ready for the whiplash reforms in April 2021. The checklist will help motor insurance distributors assess and benchmark legal expenses cover ahead of the reforms implementation.
In the midst of Covid-19 there is uncertainty about the viability of delivering the changes in the Civil Liabilities Act on the April deadline however Coplus urges motor insurance retailers to look into the ‘nitty gritty’ of new motor legal cover to avoid being caught out.
Jason Tripp, Managing Director at Coplus said, “The reforms have been repeatedly delayed and it’s not surprising that some industry figures doubt that the MOJ can be ready for April 2021. That said, we believe the reforms will go ahead as planned, and we and our partners will be ready for that outcome. Even if there is a further delay to October 2021, that’s still less than 12 months away meaning legal expenses policies issued now could be unfit for purpose in future months. Product reviews, procurement and implementation can take a long period and if an insurer or broker wants or needs to make a change there has to be sufficient time to do that.
However the changes that the reforms will bring are the biggest disruption to this market in at least 20 years. A Before the Event (BTE) Motor Legal policy as we know it now won’t be fit for purpose. The problem comes from how claims handling, and therefore customer support, is funded. Currently most personal injury claims go through the fast track and solicitors recover their fees. Flipping this around so most claims go through the Small Claims track means those fees cannot be recovered and therefore who is going to pay to help the customer?
The checklist we’ve put together is an easy to follow summary of this point and the other important things to consider within the cover that is being offered. Potentially there could be policies which don’t meet with Treating Customers Fairly principles if small claims handling is excluded. It is also a question of value to the policyholder – if there are additional fees or charges to pay over the premium at the point of claim then it will seriously devalue the cover purchased.
Our guidance is freely available on our website at: https://www.coplus.co.uk/post-reforms-motor-legal-insurance. I would urge motor insurance providers to use it to double check what cover they have in place now and what they may need to do before April 2021.”