Proposals to drive down car insurance premiums

Proposals to drive down car insurance premiums

The cost of courtesy cars should be capped to push down car insurance premiums, the the Competition and Markets Authority has proposed.

The proposal by the competition regulator is one of a number of changes proposed in the car insurance market to increase competition and reduce the cost of premiums for motorists.

The measures include:

• A cap on the charges passed to the insurer of an at-fault driver in an accident for the cost of providing a replacement vehicle to the non-fault driver, to more closely reflect the costs incurred and remove significant inefficiencies.
• Better information for consumers about their rights following an accident.
• A ban on price parity agreements between price comparison websites (PCWs) and insurers which stop insurers from making their products available to consumers elsewhere more cheaply.
• Better information for consumers on the costs and benefits of no-claims bonus protection.
• A recommendation that the Financial Conduct Authority (FCA) looks at how insurers inform consumers about other PMI-related add-on products.

Alasdair Smith, Chairman of the private motor insurance investigation group and CMA Deputy Panel Chairman, said: "There are over 25 million privately registered cars in the UK and we think these changes will benefit motorists who are currently paying higher premiums as a result of the problems we’ve found."