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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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Motor insurance firms driving up costs for accident victims

Car accidents - costly business Credit: John Stillwell/PA Wire

The Office of Fair Trading has found evidence that motor insurance firms are driving up the costs associated with having an accident.

Most of this is being done by the insurers of the driver who is not at fault, who earn fees by referring the driver to rip-off car hire firms, repairers and even paint suppliers. Here are some examples:

-Courtesy cars - drivers referred to rip-off car hire firms. Drivers keep courtesy cars for longer than necessary.

-Repair work - insurers earn fees from repairers, paint suppliers and parts suppliers for referring drivers. Some repairers charge rip-off labour rates.

Many of these extra costs are passed on the insurers of the driver who is at fault.

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