Wednesday, 24 September 2014

Unhappy Insurance Companies

The insurers are today upset about the decision of the Competition and Markets Authority telling them to get their house in order regarding pricing structures on the price comparison sites as well as more transparency over the sale of "add-on" products. Yet at the same time the CMA has advised that changes to the way the replacement "credit hire" industry operate are not needed at this time.

It would be a rare occasion if the insurance industry actually approached these debates with some actual transparency of their overall involvement in the non-fault replacement vehicle industry, instead of just trying to instil fear in people with threats of price hikes on insurance.

They moan about the cost of expensive hire cars etc, yet they created the problem all by themselves.

They stopped providing "courtesy cars" as part of standard cover, so their approved garages did not have to keep a stock of such vehicles ready for use at their own expense, but in return for this, the insurers hammered down the hourly labour rate for their repair work- so saved money which no doubt did not get passed onto consumers. They make money by selling an "upgrade" of added-on "guaranteed courtesy car cover" at usually £15 per annum to their policyholders.

However, the biggest problems for insurers is they are simply unable to distance themselves from the "credit hire" saga. Insurers fuel this whole industry by themselves as they inject the most motorists to these "expensive hire cars "simply by adopting the notion of cutting each other's throat, i.e. it is alright when it is their customer who is the non-fault party, they are happy to pass on the customer to all the trappings of credit hire etc, yet they squeal like pigs when they are on the receiving end of such charges as the fault party insurer.

A BBC article today contains the usual spin from the insurer lobby, namely the ABI. The sad fact is that most people will believe the rubbish that the insurers succeed in peddling through the press and the press in general seem happy to just print whatever rubbish the insurers release as newsworthy.

The original spin from the insurers was that by getting their way with controlling the replacement vehicle supply industry, another £20 a year could be knocked off your premiums. In reality, the study shows the reduction on average would be about £3.

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Driving down the cost of motor insurance, driving the winds of change. Free Motor Legal.
 
 

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