Are car insurers the new bankers?

Fair trading chiefs have launched a study into private motor insurance following big hikes in premiums in recent years.

The Office of Fair Trading (OFT) said its evidence suggested UK insurance premiums had risen around 12 per cent between 2009 and 2010 and that premiums had gone up by a further 9 per cent in the first nine months of this year.

The OFT said it “has reasonable grounds for suspecting that there are features of the UK’s private motor insurance market that restrict and distort competition”.

Nick Starling, the Association of British Insurers‘ director of general insurance, said: “The OFT and insurers both want the best possible deal for consumers so we welcome today’s report.

“We are particularly encouraged that the OFT recognise the highly-competitive nature of the market and the scale of the personal injury problem facing motor insurers – something we have been arguing needs to be rectified for years.

“We look forward to continuing to work with the Government to improve the personal injury compensation system.”

Read more: Soaring car insurance costs to be examined

So what’s your view?

Posting on our Facebook page, Stuart Emma told Channel 4 News “the new working classes simply cannot afford to drive”.

He added: “Car insurance should be banned and replaced with government backed, personal responsibility.

“You get a car at age 17 – 18, if you crash that car and cause injury or damage to a third party then you are responsible to pay for that damage – within reason. As the roads and cars are actually owned by the government they could cover the pay-outs up front, and not allow the person at fault to drive again until payment is complete.”

Julius Bannister agrees. “We are being ripped off by lawyers working the system, and insurers taking commissions on various (usually not required) services claimed as a result of accidents,” he said.

And Nev Rogers compared insurers to the bankers blamed for the world economic crisis: “Beats me why we spend so much energy hating bankers…”

But Tony Miller argued: “Nobody has to have a car else you would have been born with wheels, it is a lifestyle choice.”

Car insurance: a rip off or time to get on your bike?
@greggusrex simply, yes. The analysis of risky driver seems to be completely off kilter
Alex Green: I can't afford car insurance so I bought myself a bicycle about 2 years ago. It cost me about £40 a year to insure and it is cheap to maintain. I also don't pay road tax, or for fuel. Make sense?
@Flash_D76 Yes we are being ripped off re motor insurance, similar cartel to energy suppliers and encouraging no win no fee lawyers
Michael MacLeod:  I realise that cashing in on victims of crime is just part of the insurance business. 
@LeaMilligan Scandelous hikes and profiteering. You'd get better deal betting £300 at a bookies on whether you'll crash
Jane Ramsden: My insurance went up by 300 quid this year, even though i have 10 years no claims
@SeanLXIV recented moved from SE16 to L4. Privilege wanted to increase premium from £547 to £3029. Yet car crime lower in Liverpool
Fox Vicsson: I have a clean licence, haven't made an insurance claim since 1985 and my premium still goes up every year
@genellealdred The high prices mean some don't insure so it costs more because of uninsured. Make it affordable they'll still make profits
James Broome: Aren't we getting ripped off for everything nowadays? 
@Robdub1 my insurance more than doubled in 2yrs,with no claims. the underwriting banks have found another way to rip us off 
@cantgetoriginal my mum, 15 yr+ driver with ~10 yr NCB still has to pay over £800 - this is ridiculous! I can't afford my own policy either :(
Tony Miller: Nobody HAS to have a car else you would have been born with wheels, it is a lifestyle choice