Car insurance firms to face Competition Commission
Posted by James Cox on Wednesday, 4 Jul 2012, 16:49 in UK Motoring
Car insurers look set to have to face some tough questions from the Competition Commission after questionable industry practices were flagged up by the Office of Fair Trading (OFT). According to a report by the Daily Telegraph, the OFT and the House of Commons Transport Select Committee have decided to act, in the hope of getting British drivers a fairer deal. The OFT has referred the private motor insurance industry to the Competition Commission, claiming that firms act in a dysfunctional way and could be increasing premiums by hundreds of millions of pounds a year. One issue that has been highlighted involves the way vehicle repairs are managed following an accident, and the fact that at-fault drivers have little control over the associated costs. The OFT said in a statement: "We have reasonable grounds to suspect that there are features of the private motor insurance market that prevent, restrict or distort competition." Insurance policies have become unaffordable for some motorists, with newly-qualified young drivers faced with annual premiums of thousands of pounds. Young females, who in the past have tended to benefit from cheaper insurance than their male counterparts, are set to see their premiums increase by up to 25 per cent in December, as a new EU law comes into force prohibiting insurers from using gender to calculate premiums.
