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Motor insurance industry branded ‘dysfunctional’

The office of Fair Trading has moved to call the motor insurance industry dysfunctional, and has requested the Competition Commission investigate why people end up paying so much for insurance.

The cost of insurance has been on the rise for years now, and it is though it could have risen by as much as 20% over the last three years alone.

The industry has justified this by pinning much of the blame on its customers, making reference to fraudulent claims, fake whiplash and high risk habits. However a detailed look at the industry has uncovered the spiralling costs come from internal industry sources in the main.

Inside deals within firms are said to be creating a system which hikes up the cost of the insurance, and leaves customers paying too much. The system means that holders of insurance policies are being repeatedly overcharged for repairs and replacement vehicle hire, which are both being over inflated. On average this is adding at least £10 to every insurance policy.

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