OFT set to get stuck into motor insurance industry
The cost of car insurance has risen by 40% over the past year or so, but hey, that’s okay isn’t it? The insurers wouldn’t put the prices up by so much if they didn’t need to now would they? Everyone shut up and think about something else.
But wait a moment – it’s not that cut and dried. The Office of Fair Trading aren’t prepared to let it lie. They’re about to launch an investigation to see if we’re being unfairly overcharged. Phew!
We quoted that 40% premium rise figure at the top of the story but that’s just an AVERAGE. 17-22 year olds are now paying a typical premium of £2,431 per year, a hike of 64% on the past year.
The insurance companies are citing factors such as an increase in fraudulent and personal injury claims, claiming that the whiplash epidemic (570,000 claims in the past year alone) is making it tougher for everyone.
Otto Thoresen, the director general of the Association of British Insurers, said he saw the OFT investigation as an opportunity to highlight the cost pressures motor insurers are facing. “The motor insurance industry has not been profitable for the last 16 years” he said. Hopefully the OFT will find it if that is indeed the case or not.