New plans have been announced to try and reduce insurance costs and to create more competition in the insurance market. These announcements have been made by the CMA (Competitions and Markets Authority) which include the following areas:
The first area to mention is that they plan to better inform drivers about the costs and benefits of having no claims bonus protection. They are also looking to better inform drivers about the rights they have after an accident.
Another area they are looking to change is to place a cap on the charges that are passed to the insurance company of the driver at fault in the accident for the cost of providing a replacement car to the driver of the vehicle not at fault.
Alasdair Smith is the Chairman at both the CMA deputy panel and the Private Motor Insurance Motor Group and this is what he had to say on the issue: "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. A cap on replacement vehicle costs will reduce the amounts charged to insurers of at-fault drivers, which will cut out some of the inefficiencies in the system and feed through to reduced premiums for all drivers."
The final area that the CMA are looking to change is to put a ban on anti-competitive parity agreements between price comparison websites and insurance companies which stops the insurance companies from being able to offer their prices at lower prices anywhere else.
Steve White is the Chief Executive at BIBA (British Insurance Brokers Association) and this is what he had to say about the anti-competitive parity agreements: "BIBA has long-argued that some practices in the motor market, such as anti-competitive parity agreements, are detrimental to customers. It is encouraging that the Competition and Markets Authority has been listening and the resulting proposals will be beneficial to consumers.”
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