The Competition Commission has begun an investigation into rising vehicle insurance premiums after numerous complaints by angry drivers, whilst the Office of Fair Trading declared the market “dysfunctional”.
With rising insurance prices for both commercial and non-commercial vehicles affecting so many people, it may come as little surprise to many in the industry that £225m a year is being added to driver’s premiums by artificially high vehicle hire and repairs.
And with business costs under pressure, van operators could do with anything that raises the operational profitability of their vans. The OFT also says some insurers are convening with garages and suppliers of courtesy cars to allow them to charge inflated prices. The OFT has requested that the commission begin investigations into the sector.
Britain’s leading motor insurance broker has come to an agreement with all the insurers on its panel, which claims that AA customers won’t have to pay their excess or lose their no-claims discount following a crash with an uninsured driver.
It’s believed that the AA will be the first major broker to offer “uninsured driver promises”, regardless of the cost of damage or personal injury claims to customers, although promises for a similar scheme for vehicles in the commercial sector have yet to be made.
Crashes involving uninsured drivers are currently costing the insurance industry around £380 million per year – a fact which is reflected in rising business van premiums.