UK Car Insurance News
search advanced search

Home >> Car Insurance News

Regulators investigate motor insurance kickbacks scheme

Article by Simon Christopher
Posted: 3/6/2012 - Last updated: -
Rating: 0.00 (0 votes)

The car insurance market is facing a formal investigation after regulators described it as "dysfunctional".

The Office of Fair Trading plans to ask the Competition Commission to carry out a complete probe into claims that insurers allow premiums to artificially rise through dubious deals with garages and hire car firms.

The investigation will look specifically at the prices charged for repairing cars and supplying courtesy cars to customers after a crash. The problem is that its the insurer of the "not-at-fault" driver who arranges these services, but the insurer of the "at fault" driver that pays for it.

The allegation is that some insurers receive kickbacks from the garage or hire car firm for choosing their services, which are then charged at unfairly high rates. The OFT believes that on average this inflates a repair charge by £155 and a courtesy car cost by £560.

It's also suggested there's such a lack of competition among insurers that the firms paying these charges simply pass on the costs in the form of higher premiums. The total cost of the practice to customers is thought to be around £225 million.

The referral to the Competition Commission is currently provisional, with the OFT set to confirm the decision in October. Any probe would likely take around two years to complete.

PLEASE NOTE: News items are intended for information only and should not be relied upon when making insurance decisions. Due to their nature, some of the information in news stories including any references to taxation, legislation, regulation, or other issues may no longer be current.

Copyright UK Insurance Index All rights reserved.

comments about this article

Comments About this Article:

 Add a Comment

share this article

Share this Article:

rate this article

Rate this Article:

Please rate this article between 1 and 5
with 5 being top.
All ratings received for this article.

all categories ALL CATEGORIES
A-Z Categories

popular categories POPULAR CATEGORIES
Car Insurance
Home Insurance
Life Cover
Mobile Phone Cover
Pet Insurance
Travel Insurance

directory categories DIRECTORY CATEGORIES
Home & Property
Insurance Brokers
Life & Protection
Non UK Insurers
Pet & Animal
Personal Possessions
Specialist Cover

review categories REVIEW CATEGORIES
Car & Motor
Insurance Companies
Life Cover
Pet & Animal

article categories ARTICLE CATEGORIES
Car & Motor
Home & Property
Insurance Awards
Insurance Guides
Life Cover
Pet & Animal

news categories NEWS CATEGORIES
Business News
Car and Motor News
General News
Health News
Home & Property News
Life Cover News
Pet and Animal News
Travel News


Car Insurance News RSS Feed Car Insurance News Feed

You can subscribe to the car insurance news feed above in a number of ways:

1. Drag the orange RSS button above into your News Reader
2. Drag the URL of the feed into your News Reader
3. Cut and paste the URL of news feed into your News Reader
4. Add the feed to your AOL, Google, MSN or Yahoo account by clicking the buttons below.

Add to Google

Add to My Yahoo

Add to My MSN

Add to My AOL

latest articles LATEST NEWS
Speed awareness courses have hidden cost
Motor insurer takes it day by day
Car insurance costs drop
ABI targets younger drivers
Motor insurance scandal leads to major investigation

latest listings LATEST LISTINGS
Octagon Insurance
Quote Me Happy Car Insurance
RSA echoice car insurance
Your Cover Car Insurance from Allianz
Autonet Car Insurance - up to 60% off

latest reviews LATEST REVIEWS
Heritage Classic Car Insurance
Age UK Car Insurance
Carole Nash Bike Insurance
1st Central Car Insurance
One Quote Direct Car Insurance

Home | Privacy & Cookies | Terms of Use | Contact |

Page protected, do not copy

This website uses cookies to ensure a reliable browsing experience. If you continue to use this website you are consenting to us using cookies in this way. To find out what cookies are, which ones we use and why we use them please click here.

Copyright © 2019 UK Insurance Index. All rights reserved.
All directory listings, articles and reviews are provided as information only and do not constitute advice or a recommendation of any product or provider. If you use these insurers, we take no responsibility and give no guarantees, warranties or representations, implied or otherwise, for the content or accuracy of these third-party web sites or companies. If you have any doubts you should consult an authorised independent financial adviser for advice based upon your individual needs and circumstances. A database of advisers in your area is available at