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Tuesday, December 21, 2010

MPs investigate motor insurance price hikes

A Parliamentary committee is investigating the rising prices of motor insurance premiums.

The House of Commons Transport Committee has already taken written evidence and plans to take oral evidence this month. It is looking into four issues:

Why motor insurance costs have risen to such a large degree in recent years
How these high costs affect young drivers
How different factors such as accidents, fraud, legal costs and uninsured drivers contribute to the price rises
Whether the rises have an effect on society that would require or justify a Government response
Those who have already submitted written evidence have raised several issues not covered in the committee's initial statement. These include the way policies are often considerably more expensive when paid by instalments (which can be argued to penalize those on lower incomes), the fact that in 2009 the average insurer wound up losing money on motor insurance policies, and the argument that there is still a large degree of competition between rival insurers.