Is cheaper car insurance around the corner?
Motorists could benefit from further cuts to insurance premiums following the publication of a report into the market by the Competition and Markets Authority (CMA).
Free negotiations
Our view is that each site should be free to negotiate with insurance companies to achieve the lowest possible price for its customers.
Peter Plumb, MoneySuperMarket’s chief executive officer, said: “We welcome this move by the CMA, which will help bring car insurance prices down for consumers.
“The removal of clauses from some price comparison website contracts, which prevent insurers from offering a cheaper premium through another price comparison website, is a good thing.
“Unlike some other comparison websites, MoneySuperMarket does not use these clauses in its contracts. We can now work even harder with our motor insurance partners to bring even cheaper premiums to more of our customers.”
Post-claims costs
The CMA also looked at the way costs are amassed and paid following an accident.
There is broad concern that costs such as replacement hire car fees for the not-at-fault driver, which are paid by the at-fault driver’s insurer, are routinely exaggerated.
The CMA acknowledged ‘inefficiencies in the supply chain’, stating:
“The amount which at-fault insurers have to pay for temporary replacement cars provided to not-at-fault claimants is significantly more than the cost of providing these services.”
These inefficiencies inevitably feed into car insurance premiums.
No remedy
Surprisingly, the CMA has concluded that there is no effective and proportionate remedy to these problems.
It says it investigated several possible options, such as having the not-at-fault driver’s insurance cover the cost of the replacement car, or capping the amount which could be recovered from an at-fault insurer.
But it found that “these remedies would require a significant change in the law, which was not warranted since the problem caused an increase in the average premium of only £3 per year.”
The CMA want:
-a prohibit about arrangements involving specific value evaluation web sites and insurers that stop insurers through doing the solutions obtainable far more effortlessly in another place;
-better details with regard to buyers for the fees and advantages of no-claims benefit protection;
-an assessment by the Economic Perform Power (FCA) into the sale associated with ‘add-ons’ about auto insurance guidelines. The idea states constrained details regarding add-on solutions including lawful costs protect causes it to be complicated with regard to buyers for you to examine the expenses and advantages.
The particular arrangements involving specific value evaluation web sites and insurers – lengthy criticised through MoneySuperMarket – are actually regarded as anti-competitive since they force insurers for you to fee a similar value by using every electric outlet.
Should the insurance firm diminishes for you to key in your arrangement, your evaluation web page showcased refuses to offer their guidelines, minimizing their usage of market.
Free negotiations
Our view is that each site should be free to negotiate with insurance companies to achieve the lowest possible price for its customers.
Peter Plumb, MoneySuperMarket’s chief executive officer, said: “We welcome this move by the CMA, which will help bring car insurance prices down for consumers.
“The removal of clauses from some price comparison website contracts, which prevent insurers from offering a cheaper premium through another price comparison website, is a good thing.
“Unlike some other comparison websites, MoneySuperMarket does not use these clauses in its contracts. We can now work even harder with our motor insurance partners to bring even cheaper premiums to more of our customers.”
Post-claims costs
The CMA also looked at the way costs are amassed and paid following an accident.
There is broad concern that costs such as replacement hire car fees for the not-at-fault driver, which are paid by the at-fault driver’s insurer, are routinely exaggerated.
The CMA acknowledged ‘inefficiencies in the supply chain’, stating:
“The amount which at-fault insurers have to pay for temporary replacement cars provided to not-at-fault claimants is significantly more than the cost of providing these services.”
These inefficiencies inevitably feed into car insurance premiums.
No remedy
Surprisingly, the CMA has concluded that there is no effective and proportionate remedy to these problems.
It says it investigated several possible options, such as having the not-at-fault driver’s insurance cover the cost of the replacement car, or capping the amount which could be recovered from an at-fault insurer.
But it found that “these remedies would require a significant change in the law, which was not warranted since the problem caused an increase in the average premium of only £3 per year.”
