Premiums for car insurance are too high, the competition watchdog has said.
The competition commission’s investigation of the £11bn motor insurance market found it was not working well for motorists . Too many drivers were footing the bill for unnecessary costs that were needed during the claims process for accidents and that this is adding between £150m and £200m a year to motorists’ premiums. These costs are initially for the drivers who have been in the accident but always end up feeding through to everyone else’s policy.
The commission is deciding whether to make a driver’s own insurer responsible for providing a replacement vehicle or to give insurers that are at fault a greater opportunity to take control over managing claims.
There could also be caps on the costs of providing a replacement motor and on the costs the repair peoples cars. This goes along with compulsory audits of repair quality, this is after the watchdog found that many repairs have not been completed to the required standard.
Other findings where with the sale of add-on products it is hard for customers to find the best value products.The Association of British Insurers (ABI) said it hoped the commission’s work would lead to lower premiums for customers.
Its head of motor insurance, James Dalton, said: “As an industry we remain absolutely committed to improving the car insurance market for hard-pressed motorists.”
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