OFT Investigates Rising Car Insurance Premiums - September 2011

This regularly updated section of the HomeApproved web site will cover the latest trends, research, opinion and developments in the UK car insurance sector. 

Office of Fair Trading Investigates Rising Motor Insurance Premiums
Across the British Isles motorists are having to renew their car insurance policies at vastly increased rates compared to the previous year.

In particular, certain parts of the UK and young drivers are having to face up to the stark reality of premiums going up by as much as 80%! In the light of these staggering hikes in car insurance prices the Office of Fair Trading (OFT) is set to investigate the industry to determine whether drivers are being overcharged.

The actual statistics (compiled by the AA insurance premium index) suggest that annual comprehensive car insurance cover increased by 40.1% for the last 12 months to March 31st 2011.

One of the areas most affected by significant rises is Northern Ireland. At the end of August 2011, the Consumer Council for Northern Ireland launched a campaign to reduce the cost of motor insurance. This included making a formal submission to the OFT to ask it to examine the car insurance market in Northern Ireland.

Young drivers (17-22 years of age), as previously commented upon here at Homeapproved are now facing quotes for car insurance cover which are, quite frankly bordering on outrageous. The objectives of the OFT investigation should be focused on ascertaining whether such prices increases are justified?

The OFT will work in conjunction with the Ministry of Justice and the Financial Services Authority (FSA), gathering evidence with the aim of delivering its findings in December this year.

You may well of heard stories of the reasons given for the rises in motor insurance premiums. In particular, an increase in the numbers of personal injury claims and fraudulent claims in recent years. It is also worth noting that the Conservative Government has recently announced a ban on referral fees in personal injury claims.

ENDS