OFT to refer credit hire study to Competition Commission
News from Post Online:
The Office of Fair Trading has provisionally decided to refer the private motor insurance market study to the Competition Commission after finding that insurers were too “distracted” with lowering their costs and pushing up rivals’ premiums to provide policyholders quality replacement vehicle services.
It also criticised the lack of control of insurers of at-fault drivers over the cost of repairs and vehicle replacement for the non-at-fault driver creating an “inefficient” system where insurers, brokers, credit hirers and repairers can drive up their revenues.
The OFT started the study in December after it asked the insurance sector for reasons behind the rising cost of motor insurance. Costs associated with personal injury were suggested. As a result the organisation launched a study into the provision of third party vehicle repairs and credit hire replacement vehicles to claimants.
In light of the evidence the study revealed, the OFT expects to reach a final decision by October 2012.
It found evidence that insurers compete in a “dysfunctional way that may push up premiums for drivers by £225m a year”. It said that after a road traffic accident, the at-fault driver’s insurer is responsible for meetin…………… continues on Post Online