Clampdown on motor insurance market

Measures announced by the Competition and Markets Authority include banning agreements between price comparison websites and insurers

A clampdown on the £11 billion private motor insurance market has been announced by the competition watchdog which should cut the cost of drivers' premiums.

Measures announced by the Competition and Markets Authority (CMA) include banning agreements between price comparison websites and insurers which stop insurers from making their products available more cheaply elsewhere online.

Currently, some clauses in contracts between websites and motor insurers block insurers from making their products available at a better price somewhere else. This restricts competition and leads to higher premiums generally, the CMA said.

The CMA has also said consumers should get better information about the costs and benefits of taking out protection on their no-claims bonus.

It has also recommended that the Financial Conduct Authority (FCA) looks into how insurers tell customers about other products sold as add-ons to car insurance policies, and considers how consumers could be better informed about their choices.

The competition watchdog said that limited provision of information over add-on products makes it hard for consumers to compare the costs and benefits, with the sale of no-claims bonus protection "giving rise to particular concerns".

As part of its investigation, the CMA looked at the possibility of capping the cost of a courtesy car following an accident, after finding there was often little incentive to keep this cost down due to a divide between who organises the courtesy car and who pays for it.

Source: Belfast Telegraph