Insurance companies may be liable for "top-up" care for serious accident victims after two test cases in the appeal court.

In one case an insurer sought to reduce damages for brain-injured Philip Crookdake from £3m to £840,000. But the court rejected its argument that the local authority was liable for the cost of providing an adapted home and 24-hour care.

In the second, lawyers for Louise Sowden tried to increase her personal injury damages from £1.2m to £2.8m in order to pay for a private care regime in her own home. The judge ruled that the insurance company was liable to pay for care on top of local authority provision, but the level is to be fixed at a later hearing.

Belinda Schwer, an expert on care law, said these judgements suggest that an insurer is liable to pay for top-up care if there is a significant difference between what their local authority would provide and their "reasonable need", as assessed in a personal injury damages case.

John Dickson, chair of Association of Directors of Social Services' disabilities committee, predicted that councils would increasingly advise accident victims on what they could claim on insurance.

"I think the government will expect us to be moving more into the role of a broker in relation to personalised services and people's ability to secure them," he said.