Competition Committee look at car insurance

Parking_Trouble

Car Insurance Market referred to Competition Committee

Not before time although they have 2 years to complete the report.

At fault drivers have little control over the bills. IMO (and experience) the insurers do not take enough direct control and do not look after the interests of their customer.

http://www.bbc.co.uk/news/business-19755037

The market for car insurance has been referred to the Competition Commission for investigation on the basis that it is not working well for motorists.

The Office of Fair Trading (OFT) made the referral because it was worried the structure of the market was making costs and premiums unnecessarily high.

It found that insurers of "at-fault" drivers had no control over the amount spent on repairs or replacement vehicles by "not-at-fault" drivers.

The Commission has two years to report.

The OFT provisionally decided in May that the market needed more investigation and has reached its final decision after a public consultation process.

"Competition appears not to be working effectively in the private motor insurance market," said OFT chief executive Clive Maxwell.

"The insurers of at-fault drivers appear to have little control over the bills they must pay, and this may be leading to higher costs for them and ultimately higher premiums for motorists."

The OFT was particularly concerned that replacement vehicles being provided could be unnecessarily expensive and they could be being provided for longer than necessary.

It said that such practices were pushing up total premiums by about £225m a year."

InsideInsurance

Parking_Trouble wrote: »

At fault drivers have little control over the bills.

How is this different to any other claim other than car accidents under the law of torts?

The whole point is that you have done something wrong (or failed to do something you should have done). The other party is entitled to be put back into their former situation before your negligence. The other party has an obligation to do this at a reasonable cost and the courts are there to adjudicate what is reasonable if the two parties cant.

Most of the things you are considering as "wrong" tend to be commercial agreements within the industry - eg the RIPE agreement or bordereaux payment of credit hire. Evidently some within the industry consider not having to hire and house an additional 100 claims handlers and engineers more cost effective than avoiding the occasional excessive repair or getting a blanket 25% discount on credit hire rates better than investigating and arguing each case individually.

I think there could be improvements but many of those making suggestions are doing so from very ill informed positions and not thinking of the wider costs etc