Car insurance is something that becomes increasingly expensive year on year and this is something that upsets consumers a great deal. Recently, a consumer watchdog has found that insurance companies have been taking advantage of people and overcharging them for an insurance policy.
In order to tackle the problem the Competitions Commission have stated that they are going to be conducting a year wide investigation into the pricing of insurance premiums. The watchdog estimated that in the past year car insurance buyers have been exploited to the tune of over £200 million.
The Office of Fair Trading have recently issued a report which is shown that insurance companies are inflating premiums because the cost of fixing cars has become excessive. Insurance companies have also said that costs are high because they often have to provide rental cars for drivers who have not been at fault.
Referral fees are also an enormous problem and the investigation by the OFT has shown that many insurers were referring repair work to preferred garages in order to reap the benefit of the referral fee which can sometimes be up to £400. Of course, this fee is ultimately paid by those taking out insurance policies.
Although the referral fees are relatively bad, this is not quite as bad as the situation that has been seen where some garages are overcharging on the labour so that the bill can be padded and more can be charged. Of course, this only happens when the insurance company is dealing with a driver who has not been at fault and the repair work is being paid for by another provider. Which? have welcomed the investigation