OFT smell something fishy in car insurance market

car If you suspected that there might be something a bit iffy about the car insurance market, then it seems that you’re not alone – the Office of Fair Trading is about to get the Competitions Commission to take a close look at car insurance costs after announcing that the market is ‘dysfunctional’.

They’ve decided that a whopping £225m per year is added on to drivers’ premiums each year through artificially high car hire and repair charges and they’re planning to stamp it out. The accusation is about the relationship between insurance companies and garages regarding the cost of repairs and supply of courtesy cars.

Basically, when a claim is made, the insurer of the "at-fault" driver normally has to pay for repairs and temporary car hire for the other driver in the accident. The OFT are alleging that these costs are pumped up by the insurer of the "not-at-fault" driver arranging artificially expensive car hire deals and repairs, in return for a tidy payment from the car hire firm or garage involved. All in all, it’s a diabolical set of circumstances, where the only loser is us, the poor, innocent consumer.

The OFT has provisionally referred the car insurance industry to the Competitions Commission and a decision is expected in October.


  • Me
    Why has it taken them so long to figure this out?
  • vibeone
    Bastards.... absolute bloody bastards.
  • Alexis
    About bloody time
  • Mike c.
    As usual they are all in together but not one dick working for them complains or lets the cat out the bag yet they suffer just like the rest of us; absolute twats the lot of them. Hope the OFT comes down on the thieving bastards. It is they who cause so many to drive uninsured.
  • Mike H.
    The fish has been there long enough, festering. They should have smelt it fucking ages ago, probably the heat. Mike Hunt, that is utter codswolop. These little chavs in their corsa's wouldn't pay for insurance if it was less than a copy of MAX POWER you cretin!
  • Mike H.
    You know I meant Corsas.
  • vibeone
    Actually, it's more likely the consumers that are to blame. Claiming whiplash, false claims, organised 'accidents' then they probably chat to the garage to have loads of other unrelated faults sorted. So it's your fucking fault. So shut the fuck up.
  • Mike H.
    ^ Fake, vibeone wouldn't say anything THAT intelligent, that is something that I, Mike Hock, would proclaim! Ahem...
  • Idi A.
    Okay, so stamping these practices out will bring us lower premiums, right? Just like last week's suggestion by the banks that we pay (again) for our accounts would mean the banks would no longer do anything dodgy? As if.
  • klingelton
    The reason competition exists is so when one company does something completely cuntish, you can move over to another that won't do anything of the sort. This works in the rail industry, banking sector, Energy provision, Water and now insurance. Apparently capitalism works just fine...
  • StripeyMiata
    I have to admit I've always been puzzled how a F1 driver can walk away from a 180MPH crash but if you run into the back of Nissan Micra at 10MPH the other driver gets debilitating whiplash.
  • peacheyd
    Whiplash should not qualify as a "claimable" injury, its just a very small risk that comes part in part when driving. Im pretty sure I've had the equivalent of a minor whiplash from sleeping at a funny angle, its fuck-wits who decide to "have a claim up" who drive the cost of premiums.
  • pip
    I used to work in the insurance litigation department of a solicitors firm, and what has been outlined above is nothing on what is really happening within the industry, all of which I cannot really disclose. Instructions were received from a leading car insurance company to attempt recovery of the outlay from the at fault drivers insurance company. However, the amount that was being claimed was several hundreds of pounds above what they actually paid for the vehicle to be repaired. Their model involved creating a separate breakdown of the costs and presenting this to other side's insurance company, when in fact, the original invoice, which was never disclosed, showed a substantially lower amount. This obviously has an adverse affect on premiums, and in some cases, when the costs of repairs were not recovered due to question marks around the manufactured invoice, the non-fault driver still lost their no-claim discount. I suspect many insurance companies indulge in the same practise.
  • pip
    Just to add to the above, this is not just restricted to vehicle repairs or hire, but a number of other heads of claim. For example, I once had a client ask me whether it was possible to recover his loss of earnings for two days he took off work to deliver his vehicle to the reparing garage, and for when he collected it. The thing is, his insurance company were already attemting recovery of a £110.00 collection and delivery charge, and had an 'invoice' to suggest the same.

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