UK’s consumer watchdog, the Office of Fair Trading (OFT), looks all set to launch a vendetta against the private motor insurance market. The statutory body announced on Thursday that it would be looking into the reasons behind the hikes on car insurance prices.
While car insurance companies have another reason to look over their shoulders, consumers can rejoice again. Since the last year, insurance premiums have shot up by as much as 40%, posing massive financial problems for consumers in UK. In the midst of inflation and rising household expenses, car insurance overshots are definitely not welcome visitors.
OFT cited some key elements of UK’s motor insurance market as sources for consumer issues, namely; use of approved repairers, role of price comparison sites and sale of add-on products such as legal protection by insurers.
According to sources, OFT declared that it would publicise its findings by December this year, adding that further course of action would depend on the results of the study. The findings in question have been gathered in the course of five weeks with the assistance of interested parties.
This is the first time that OFT has investigated the private motor insurance market. However, with cheap car insurance being all but defunct, it’s high time someone took corrective measures, according to the public.
The AA, a competition watchdog, had earlier published its most recent quarterly figures, which claimed that although typical comprehensive policy prices were still increasing by 30 percent till June 30th, 2011, premium rate increases had slowed down by the second quarter of this year.
A spokesperson for AA was quoted as saying, “The OFT wants to establish the full facts, the reasons behind any increase, and whether there are any consumer or competition issues that need to be addressed to improve the functioning of the market.”
However, the motoring body added that it would not be probing the rise in prices due to personal injury claims, which could be a significant factor for the hike. AA also said that the matter would be left to the honourable Ministry of Justice, which was already investigating the issue.