The Competition Commission (CC) has published its provisional report into the supply and acquisition of car insurance in the UK. Whilst the full report is not expected until September this year, the provisional findings make illuminating reading for consumers and businesses who acquire motor insurance.
Significantly, the provisional report finds that certain deficiencies in the market could be linked to higher premiums. Mentioned in the report are the sale of extra services added on to base premiums and, perhaps more fundamentally, in the situation of an accident, it is the non-paying victim who controls costs by arranging for their own replacement car and repairs. These costs are then reimbursed by the paying party. The CC report believes that if the at-fault party carried out repairs and sourced replacements, there would be an incentive for repair and replacement costs to be minimised, and, in term, premiums would be lower to reflect the lower cost of repair to insurers.
Read more about this topic and other interesting EU and competition law issues in December’s Bryan Cave’s EU & competition newsletter.