Insurance costs too high for UK motorists

Insurance costs too high for UK motorists

Drivers in the UK have recently been told by the Competition Commission that they are paying too much for their car insurance. Whilst this will come as no news for many, does it mean that anything is going to be done about it?

The competition watchdog are recommending that premiums be reduced and that a widespread reform of the costs of insurance needs to happen. It has identified a number of wasteful costs that are charged during the process of insurance claims, and currently it is the end user that is paying these fees.

Whilst the commission says that the insurers of the liable drivers should be covering these costs, it nevertheless appears that such costs are being covered by the raising of insurance premiums for all drivers.

The relationships between websites offering insurance price comparison and the insurers they appear to be promoting is also on the Competition Commission's target list. The leader of the investigation for the Commission, Alasdair Smith, says that a number of reforms are being examined.

He went on to say that in most insurance cases there can be seen a conflict of interests, whereby the party that is looking after an accident claim is not the same party that is ultimately responsible for the costs of the claim. This separation can cost the industry, though more likely the end users, up to £200 million per year, according to the watchdog.

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