The Office of Fair Trading (OFT) has today announced the referral of the investigation into the car insurance market to the Competition Commission, following worries of malpractice due to the current structure, which is not only unfair on consumers but ultimately add unnecessary costs to drivers’ policies.
Recent figures show accident repairs to be inflated by an average of £155, with replacement car hire an average of £560 more expensive than necessary. This is said to be adding £255m a year onto the cost of car insurance policies and in times where money is tight and insurance price rises seem like an all too frequent event, action really needs to be taken to prevent it happening any further.
Tim Harris Chief Executive of ChipsAway, the UK’s leading independent car paintwork repair specialist, is supportive of the comments made by Clive Maxwell, Chief Executive of the OFT, who says, “Competition appears not to be working effectively in the private motor insurance market.”
Tim comments, “We have known this has been going on for years and always thought it unfair that the insurer of the driver at-fault has little, if any, control over what they must pay in repair bills. The fact that many insurers are arranging artificially inflated repairs and car hire charges in return for a lucrative fee from their suppliers is completely unacceptable and something we are pleased is finally being made public and investigated.
“It is bad enough to be involved in an accident, let alone having to pay excessive insurance costs. And it isn’t just the consumer who’s left out of pocket – the garages and repairers who don’t get involved with back-handers to insurance companies are tarred with the same brush, which is completely unjust!”
Tim concludes, “We have been campaigning for years to let consumers know they don’t have to claim on their insurance for minor repairs such as bumper scuffs and kerbed alloys, which will not only mean forking out for their excess, but also an increase in their insurance premium as a result, and we hope this latest report will help make consumers more aware of the alternatives available to them.”