Labour promise probe into soaring car insurance costs
June 04, 2024 by Tom Barnard
Car changing is a big deal
Labour will launch a probe into the soaring costs of car insurance if it is elected into power, Shadow Transport Secretary Louise Haigh has promised
- Labour’s Shadow Transport Secretary promises investigation into rising premiums
- Louise Haigh says they will take action on unfair practices in insurance industry
- Average premiums have risen £219 in two years, she claims
- Broker’s set-up fees and cost of monthly premium payments to be investigated
- The Association of British Insurers says action is already being taken and blames costs
Haigh has promised she will subject the car insurance industry to scrutiny from the Financial Conduct Authority and the Competition and Markets Authority, saying: “Car insurance is not a luxury but a legal requirement, and it is completely unaffordable for millions of drivers…. We will urgently call in the regulators to crack down on any unfair practices and to come clean on the causes of soaring costs for consumers.”
There has been a £219 increase in the average premium in two years, according to Haigh, who has called for transparency from the industry over the cause of the rises in premiums. She said she will also ask the independent watchdogs to investigate additional costs, such as brokers’ fees which can add £40 to bills.
Haigh also said ‘postcode pricing’ of premiums unfairly targets those who live poorer areas. Conservative Mark Harper, the current Secretary of State for Transport said Labour wanted to “outlaw the ability for insurers to price according to risk in local areas.” He claimed this would mean “people across the country face higher costs to reflect the higher crime that we see in inner London, where the Labour Mayor has failed to get a grip.”
The Association of British Insurers defended its members, saying: “Motor premiums increased by just 1% in the first quarter of 2024, indicating an easing of rises seen in 2023. However, insurers continue to absorb growing costs, with the average claim paid rising 8%.
“The industry is committed to taking action. Just last week it announced that its members had agreed a set of principles on premium finance, aimed at managing the cost associated with paying for insurance on a monthly basis.”
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