According to the Office of National Statistics, the number of road traffic accidents occurring in the UK that lead to reports of bodily injury have gone down by a significant margin over the past few years. However, despite this welcome drop, car insurance rates have been going up quite steadily, and motorists are getting quite tired of receiving renewal notices from their car insurance companies every year that include a premium price increase.
a nation of weak-necked drivers
Much of the problem is that the number of personal injury claims made against insurers have gone through the roof, both in volume and value, even though the number of accidents have gone down by a considerable margin. Whiplash claims have been especially costly for the insurance industry, especially because they are notoriously hard to defend against, which leads most insurers to simply settle out of court, even in the event that the claim may be spurious.
With all these claims being paid out by insurers, the costs of these claims have been rocketing to eye watering levels. In order to recover these costs, insurance companies have had no choice but to charge their customers higher premiums. However, this isn’t the only reason insurers’ costs have been increasing so much lately.
THe OFT and the Competition commission
Unfortunately for the insurance industry, the Office of Fair Trading has looked into other sources of high insurance premiums, discovering that there may be more than a few discrepancies between how much insurers claim it costs to repair a damaged car or to provide a replacement vehicle to a customer from a car hire firm and how much it actually does cost to do so. In fact, thanks to many complaints made to the OFT about possible price gouging occurring in the insurance industry, it recently decided to refer the entire industry to the Competition Commission.
The Commission is now running its own, independent investigation into how much it really does cost to provide car hire or repair services to customers of insurers and how much insurers are charging customers. If there is indeed evidence of price gouging, it could spell very bad news for car insurance companies, as they could face consequences; however, it could lead to some relief for the nation’s drivers, considering how they’re already suffering under incredibly expensive premiums at the moment.
However, for any driver who has had it with high insurance rates but is unwilling to wait until the Competition Commission has completed their two year review of the insurance industry, it may be beneficial to consider a telematics-based insurance policy. Since telematics keeps track of your motoring habits through satnav technology, you will be rewarded with lower insurance costs as long as you drive in a safe and responsible manner, and many drivers have opted for the cover in order to control their driving costs.
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Image: Car Insurance Quoe Needed by Insure Wish