Car insurers driving up premiums
The motor insurance industry is providing a poor-quality service and leaving consumers short-changed, competition watchdogs have said.
With premiums currently rising by £225m a year and at-fault drivers given little control over repairs and replacement cars, the Office of Fair Trading (OFT) has referred the industry to the Competition Commission, which will launch a full investigation.
The OFT, which provisionally decided to refer the industry to the Competition Commission back in May, said that car insurance firms were driving up premiums by as much as £10 per policy
The trade watchdog said there was "no quick fix" to the problems ailing the industry and that a thorough investigation was required, with the commission now given up to two years to deliver its report.
Clive Maxwell, chief executive of the OFT, said: "Competition appears not to be working effectively in the private motor insurance market.
"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."
published: 28/09/2012 17:00:01