Are the Insurers playing it fair?
In the last few weeks, I tried to cover various aspects of how dishonest citizens try and cheat insurance companies to get more than their fair rights. But then I realized that I am actually missing the other side of the coin. After all car insurance is a business, and there are good enough chances of insurance companies being involved in unfair means or some kind of tactics to grab more money from the customers. Well, I don’t insist but there are chances right!
The Office of Fair Trading (OFT) had reported the UK Car Insurance market to the competition commission after suspecting some faults in the working of the industry. The investigation of the working model of processing of car insurance claims, it was reported in the findings that at-fault drivers had no control on the way how repairs are done and replacement vehicles are provided to the not-at-fault drivers. This potentially played a major role in increasing the premium rates for the at-fault drivers.
Competition commission is supposed to further investigate this situation and come up with possible remedies to the existing condition but as of now there is no possible “quick fix” available for the prevailing condition.
The overall investigation conducted by OFT reveals that the insurance companies of not-at-fault drivers are actually trying to take advantage of insurers of at-fault drivers. It is stated that the insurers of not-at-fault drivers refers the drivers to organizations that tend to charge higher repair rates in exchange of huge referral fees. This ultimately increases the repair bills that are to be paid by the insurers of at-fault drivers. It was believed that some companies have agreements with repairers to charge higher labor rates when repairing the vehicle of the not-at-fault driver. The situation gets worse because the bills to be paid by the at-fault drivers’ insurance company also include the cost of replacement vehicle to be provided to the not-at-fault driver.
All this and more contribute to the inflation of bills to be paid by insurers of at-fault drivers and boost the revenue of not-at-fault drivers’ insurer. But this is ultimately passed to the at-fault drivers in form of higher premium rates. So, at the end the customer suffers and that’s the major reason why this issue has been brought into consideration.
Article written by the marketing division of Car Insurance Wizard