Belfast Telegraph

Watchdog blasted for rejecting courtesy vehicle cost cap

By Jamie Stinson

The British insurers' body has slammed the competition watchdog for failing to protect people from the "excessive cost of replacement vehicles" after a crash.

The Association of British Insurers said the Competition and Markets Authority's (CMA) report into the market was "a bitter pill to swallow for motorists".

Controversially, the CMA did not call for the introduction of a cap on courtesy car and repair charges, despite it previously claiming there was little incentive to keep such prices down.

The CMA said that while the practice caused "inefficiencies", there was "no effective and proportionate remedy" for this.

But James Dalton, ABI's head of motor insurance, said: "The fact that it (CMA) fails to do anything to address the excessive costs of replacement vehicles – a problem that the CMA itself identified – will be a bitter pill to swallow.

"Far from reducing the cost of insurance, the CMA's inaction entrenches the business models of some vehicle providers who profit from inflating car hire charges at the consumer's expense."

Richard Willis, managing director of Willis Insurance in Coleraine and Belfast, backed a cap.

He said: "Normally, insurers have negotiated discounted repair and car hire rates due to volume deals but are forced to accept higher charges by parties acting for the non-fault driver."

But Alasdair Smith, CMA deputy panel chairman, defended the decision. He said: "We cannot see an effective way of addressing this problem fully short of a change in the law

"While this problem does increase premiums, the extent of is not as high as was at first envisaged and does not warrant such a radical measure."

Belfast Telegraph