posted 2 years ago

New Proposals To Cut Cost Of Motor Insurance

Competition and Markets Authority Proposals Radical Change

The Competition and Markets Authority has revealed a range of proposals relating to private motor insurance that could “reduce the cost of premiums”. The Authority hopes to increase competition too. Proposals include “a cap on the charges passed to the insurer of an at-fault driver “ - after an accident - “for the cost of providing a replacement” car to the innocent party. Prices should then “more closely reflect the costs incurred” that can appear disproportionate. This, of course, should reduce premiums (assuming any saving is passed on). Other proposals include: “better information for consumers about their rights following an accident”. The Authority has also recommended a “ban on price parity agreements between price comparison websites and insurers” that stop insurers making their products available more cheaply elsewhere. There should also – it has been argued - be “better information for consumers on the costs and benefits of no-claims bonus protection. Finally, the Financial Conduct Authority should consider “how insurers inform consumers” about insurance related add-on products. The Competition and Markets Authority – which replaced the Competition Commission in  April 2014 - is now consulting on these measures before any final decisions are announced in September 2014. Interested parties have until July 4th 2014 to express their views by post and e-mail.

Competition and Markets Authority Representative Discusses Private Motor Insurance

Alasdair Smith, Competition and Markets Authority Deputy Panel Chair, said: “There are over twenty-five million privately registered cars in the UK - and we think these changes will benefit motorists who are currently paying higher premiums as a result of the problems we’ve found. A cap on replacement vehicle costs will reduce the amounts charged to insurers of at-fault drivers, which will cut out some of the inefficiencies in the system and feed through to reduced premiums for all drivers.” Mr Smith added: There also need to be improvements to the way price comparison websites operate. We believe they are great in helping motorists look for the best deal and this, in turn, has driven insurers to compete more intensely. But we want to see an end to clauses which restrict an insurer’s ability to price its products differently (whether on different price comparison sites or on other channels).” Mr Smith continued: “We also find that the way motor insurance-related add-on products are sold makes it hard for customers to obtain the best value. We find that there are particular problems in relation to no-claims bonus protection, where both the price of this product and its benefits are often unclear to consumers. Insurers should provide much better information about it”, Smith concluded.

 

I reversed out of a disabled bay in a shopping precinct, stopped and put into drive. An elderly lady then reversed into me while I was stationary. She claimed £380 repair costs (her vehicle value was £290) my insurance company went 50/50 despite my objections. This need changing. I was penalised for someone elses error.

I also forgot to add, that having recently had a car accident where my vehicle was written off (and being offered the book price which was well below the current cost price for replacement for like for like) I was informed that costs for the courtesy car provided would effect my payout as this was effecting the insurance companies administration costs, but if I sent the car back early I would get a better final payout - how does that work? So I was pushed by the hire company to take a like for like hire car even though I was happy with a smaller vehicle to then find out I was being penalised for this! Complete lack of information upfront from Tesco Insurance! Stay clear!

All interesting reading but how will this benefit young drivers? As a parent trying to sort insurance for my daughter I'm aghast at the costs and there seems no way to reduce them to a manageable level. It's also disconcerting that figures quoted of 15% of road accidents are caused by young drivers but that's only 15% of ALL road accidents so those causing the other 85% aren't being penalised! A suitable proposal I'm sure could be to offer sensible initial premiums to younger drivers but with large excess levels and should they then have an accident which is their fault then any new premium will be hiked. This would I'm sure reduce the level of 15% down as they would want to keep their premiums low instead of the current situation where they are dammed whatever!

Ron, you are indeed correct, and there are lots of things you can do.We do reports called "causation reports" or "Locus reports" and we can help prove fault.If not your fault ,cost can be passed to the t/pty insurer.You own insurer"should" do this ,buy often does not...but things get very murky after that if you want to know the full stories.

What about insurers default clauses????? T&C.. which penalise their drivers because they are not prepared to fight for those innocent customers ie broken mirrors, etc. This results in 50/50 settlement instead of fault claim on guilty driver, resultant premium increases to both parties, due insurance data base (artificially) recording a fault claim over next 5 years. Prot. no claims bonus is then a farce, quite often due to agreement between companies for self financial interest alone. This should be dealt with more urgently, as even ombudsman will uphold legal t&c ,over right & wrong, without being legally tested! Loaded against customers from the start who discover only when a claim is made... ie not prepared to accept the truth! This will result in their mutual agreement to record 50/50 blame on both parties, when simply not true! One quick phone call between claims departments "trumps" all statements of facts which create masses of paper work to no avail for customers! T&C BEWARE YOU HAVE BEEN WARNED!!!!!