If the extraordinary cost of car insurance was a crime, insurers were always the ones that got away.
While lawyers protested their innocence as they were led away by Officers Grayling and Clarke and (PCSO) Djanogly, the insurance firms were burning their clothes and wiping the blood from their hands.
Personal injury firms were accused of ambulance-chasing and found guilty behind the closed doors of the Ministry of Justice. Their sentence of reduced costs and consolidation continues today and there is little sign of them being let off for good behaviour.
But the case was never completely closed on the insurance industry. In September 2012 the Office of Fair Trading handed the issue over to the Competition Commission in its very own game of pass the parcel, and today the music stopped with its provisional report.
Given that it took so long, the findings are hardly groundbreaking but they mount a pretty strong case for the prosecution.
The commission provisionally found that a ‘complex chain’ for the settlement of non-fault claims increases the cost of hire vehicle and repairs which in turn is passed to the insurers of at-fault motorists. The overall detriment was estimated at £150-200m per year.
Not only do they rip off motorists, the car insurers have little incentive or interest in making sure repairs are up to scratch. The commission found that insurers and claims management companies do not effectively monitor the quality of repairs and give claimants little chance of checking it themselves.
Alasdair Smith, deputy chairman, said: ‘We have concerns about the quality of post-accident repairs because too many repairs are substandard. We also find that the way add-on insurance products are sold makes it hard for customers to find the best-value products’.
The commission’s options include a cap on the cost of replacement vehicles, or making an insurer of the not-at-fault driver responsible for providing the replacement vehicle. Although, with customary haste, the commission has confirmed no final decision will be made until next September.
Until then, the insurance sector sits in the interview room reading out a pre-prepared statement. James Dalton, ideal Bond villain and ABI head of motor, said the industry remains ‘absolutely committed’ to improving the market. Dalton should get in touch with scrap metal dealers as his brass neck is surely worth a bob or two.
The insurance industry has always been just as – if not more – culpable than anyone for the cost of premiums. The Competition Commission report just confirms what we always suspected – that this is a cartel rigged to maintain profits and to hell with the consumer.
The commission has prepared the ground for a guilty verdict – once it comes the government will have to show the same verve for punishing insurers as it reserved for personal injury lawyers.
John Hyde is a Gazette reporter