Car insurance firm market probe

The Office of Fair Trading (OFT) is to refer the private motor insurance market to the Competition Commission for practices that, it claims, drive up the cost of premiums.

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'Credit hire firms tripling cost of courtesy cars'

Having a car accident can incur a range of fees Credit: REUTERS/David Caird/Pool

Insurers are making money from drivers who break down by referring them to a range of emergency services.

For example, credit hire firms pay tip-off fees of around £300 for details about a driver involved in an accident so that they can arrange a courtesy car. The bill is then passed on to the at-fault motorist's insurer for the cost.

Evidence to the Office of Fair Trading suggests credit hire firms charge between £1,200 and £1,500 for the service, compared with £400 to £500 if the insurer organised the vehicle themselves.

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