“No Fault Accident” Hire Care Charges are a Ticking Time Bomb!
Last month new rules were published by the Regulator that ban the exclusivity agreements between price comparison websites and for the consumer to find cheaper premiums online
The private motor insurance market in the UK is worth £11 billion pounds and the Competition and Markets Authority (CMA) clampdown will boost competition and could lower a typical policy by £20. Read the full details here: Competition and Markets Authority.
Unfortunately there was no recommendation to change the current provision of replacement car hires for drivers in a ‘no fault’ claim following an accident that takes their car off the road for some time.
The Association of British Insurers (ABI) have accused the CMA of ducking the issue and said that this was bad news for consumers. But the CMA have asked that better information should be made available to consumers, especially about no-clams bonus protection and its various costs and benefits.
The Chairman of the CMA Alasdair Smith, 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. “There need to be improvements to the way price comparison websites operate. “We want to see an end to clauses which restrict an insurer’s ability to price its products differently on different online channels.”
His explanation about the cost of temporary replacement cars following a no fault accident was:
“Reluctantly we have had to conclude that we cannot see an effective way of addressing this problem fully short of a fundamental change in the law and, whilst this problem does increase premiums for motorists, the extent of the problem is not as high as was at first envisaged and does not warrant such a radical measure. “However, we do wish to challenge the benchmarks typically used in awards for non-fault replacement cars, which do not reflect the cost of the services provided and which we think should be lower.”
The Head of Motor Insurance at the ABI, James Dalton, replied:
“Today’s CMA report is the culmination of three years of work and has cost taxpayers millions of pounds. The fact that it fails to do anything to address the excessive costs of replacement vehicles – a problem that the CMA itself identified – will be a bitter pill to swallow for honest motorists.
“Far from reducing the cost of car insurance, the CMA’s inaction simply entrenches the business models of some replacement vehicle providers who profit from inflating car hire charges at the consumer’s expense.
“The reality is that the CMA has ducked this challenge and when regulators fail, politicians need to step in to act.”
Here at Cornerstone Insurance, we have a mini ‘add-on Policy for £2 a month that will give you the hire car you need and not the the little bean can they allocate, then please give us a call on 0116 340 0040