Car insurance companies pocketing profit, ripping off Brits?

According to the Office of Fair Trading, some car insurance companies are making a tidy sum by ripping off their customers by selling crash victim retails to car hire companies that are no better than rip off artists.

The discount car insurance industry sells its customers’ details to many other entities as well, the OFT found.  These included breakdown firms, garages, and in some cases, even emergency services – and while insurers may be pocketing the profits, costs are passed along to the nation’s motorists through higher car insurance rates.

The OFT drew attention to the questionable practice during the launch of its investigation into the car insurance market in the UK recently, which generates approximately £9.4 billion in revenue on a yearly basis.  The industry, which refers to the selling of personal details as ‘collecting referral fees,’ has been under fire from all sides by those who see the payments are little more than kickbacks, with the Government vowing to ban referral fees in cases of personal injury compensation claims – yet a loophole left in the proposed legislation allows the practice to continue in other sectors.

Drivers involved in a road traffic accident through no fault of their own are viewed as a hot commodity in the insurance market.  This is because garages and car hire firms will squabble over the opportunity to do business with a motorist whose car is in need of repairs or who needs a courtesy car to continue going about their business whilst repairs are completed, with some firms paying referral fees of as much as £300 to be given access to the personal details of such a driver in need.

The motorist’s own insurer is often the one who hands over their details as soon as the incident is reported.  Other entities, such as any emergency services in attendance at the scene of the accident, brokers, or breakdown firms, also sell on the details as well.

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