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BTE - Before the Event Insurance

The personal injury compensation market has developed significantly over the past few years but it has also experienced immense change during that period too. An element involved in the process that more often than not goes unmentioned is ‘before the event insurance’ or BTE as it is commonly referred to and of course ‘after the event insurance' (ATE) which has now become the subject of reform proposals in the latest DCA papers.

Before the event insurance is and always has been a reasonably priced pre-event insurance product commonly targeted at motor insurance and home insurance clients. With over twenty four million motorists in the United Kingdom it is easy to appreciate that the market for before the event insurance is huge and with premiums starting from ten pounds to about twenty five pounds one can imagine the revenue involved which runs into millions of pounds.

The benefits of purchasing a before the event insurance policy essentially means the policy holder can call upon legal and uninsured loss services in the event of a accident occurring (Some 16% of motorists are involved in accidents every year.) The downsides to before the event insurance if they are seen as downsides are the fact the claimant rarely has any choice in picking their legal representation, this is part and parcel of the insurance policy that the underwriter will have control and decide which ‘panel solicitor’ to send the case to. Panel solicitors effectively then have to pay a referral fee to the case provider which further boosts the income stream for the before the event insurance provider.

In some cases particularly when insurance brokers are involved in selling before the event insurance with their own motor insurance products they may just give the BTE insurance as a free addition because the referral fees from claims are profitable enough (it is not unknown for referral fees to exceed £500). Before the event insurance is undoubtedly a valuable asset to the consumer, many such policies include up to £50,000 worth of cover however there is the argument that no law firm will ever turn you away if you are looking to claim personal injury compensation after suffering a non fault accident.

It would be quite surprising if claimants realised that referral fees have been involved in the claims process which is quite ironic because it is actually a duty and obligation of the solicitor to inform the client that such fees have been involved in the case albeit they do not reflect on the client. Where insurance brokers and insurance companies are involved they are also expected under their FSA requirements of ‘treating the customer fairly’ to inform the client of all fees involved.

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