OFT To Investigate £10 Billion Car Insurance Industry

OFT To Investigate £10 Billion Car Insurance Industry

Cheap car financing does not seem to have any use when the car insurance premiums just keep getting higher and higher. This is in lieu of the estimated 21 % increase in car insurance costs during the last two years. On the other hand, while some motorists endure a 21 % increase, others may endure a much higher premium of up to 40-50 %. snjauto

With these findings, the Office of Fair Trading (OFT) has decided that it is about time for them to look into every element that might affect these staggering insurance rates. As of a recent announcement, the Office of Fair Trading (OFT) has stated that they are now commencing an investigation within theUnited Kingdom’s £ 10 Billion car insurance industry.

According to the Office of Fair Trading during their preliminary research, they believe that they have enough proof to suspect the industry of iniquity. These ‘reasonable grounds’ that the OFT has been speaking of relates to the restricted competition within the replacement vehicle-for-hire companies and within the car-repair garages. It is because of this strained competition within the industry that has lead car insurance companies to comply with their demands. Hence, car insurance premiums have been on the rise ever since. Top Questions You Should Ask Before Choosing Specific Car Insurance Quotes

In relation with the investigation of the Office of Fair Trading, they have found out that insurers have a hard time trying to scrutinize whether or not insurance claims for alternative transportation and vehicle repairs were actually reasonable anymore.

The Office of Fair Trading has pinpointed referral fees as one of the factors that have cause car insurance premiums to increase. These referral fees refer to the commissions that have been received by car insurance companies from third parties like a personal injury law firm. The commission is given to the insurance provider in exchange for a policy holder’s contact and accident information. Thankfully, the Minister of Justice has called a stop to this perverse habit.

Sonya Branch, spokesperson for the OFT, has stated that, “With the arrangement of for-hire replacement vehicles and third-party repairs to policy holders, we believe that insurance companies are competing to extract as much money as they can from each other rather than by keeping car insurance premiums at a low.” MP Report On Rising Car Insurance Costs

The Office of Fair Trading expects to end their investigation before the end of this winter season. The Office will also look into the possibility that insurance companies are neglecting to give pertinent information to motorists regarding legal protection rights and other important factors that regard their insurance coverage.