High time for a blog again, so here we go.

Do you remember the mantra we’ve been fed by the massive multi-billion pound profit making insurance industry about our car insurance premiums going up because of evil, fraudulent whiplash claimants and ambulance chasing compensation lawyers? Well that has exploded in the insurance industry’s face this week with the publication of the Office of Fair Trading’s (OFT) report on car insurance and the insurers’ behaviour.

The OFT has been shocked to find that the car insurance market is totally “dysfunctional” and riddled with sneaky kick-backs that the insurers themselves pocket, at the expense of hard pressed customers whose premiums then go up. The OFT are so concerned that they have referred their findings to the Competition Commission.

Insurers have been caught fair and square with their hands in the cookie jar. It’s now absolutely clear that anything they can sell out of the wreckage of every road traffic accident is sold.

Look at some examples:

• If you are at fault for the accident you would think that that was all bad news for your insurers, but no, if you have passengers they “capture” them as soon as possible and sell them to their tame solicitors to bring injury claims. They call it something smooth and reassuring like “referring your passengers to our approved panel solicitors”, like they are doing you a favour. BUT – the tame solicitors pay your insurers hefty kickbacks for these passengers’ claims. This means that even out of bad news the insurers get some money. Money for nothing.

• If you weren’t at fault then your insurers will urge you to send your damaged car to their tame garage for inflated-price repairs to be done and the tame garage pays your insurers a kickback for sending them your business. They probably call the tame garage something like “our approved repairer” to reassure you again. More money for nothing. They also arrange you a courtesy or hire car and, guess what, they use a tame hire car company who charge inflated prices and pay your insurers a kick back, again for sending them the business. More money for nothing. These inflated repair and car hire costs are claimed back from the driver who was at fault and his or her insurers. To cap it all your own insurers also sell you and all of your passengers to their tame solicitors again, once more for a kick back. More money for nothing. All of these practices are anti true competition.

So what is the overall effect of these kick backs and money for nothing scams?

Two answers, firstly more profit streams for hideously rich insurance monoliths and, secondly, inflated claims so they can justify your premium and mine going up! What a great idea, more profit streams and a pretext to charge more in premiums!

Insurers should be very uneasy about the OFT report because this is not the end of this and the murky practices are going to be laid bare. They won’t be able to keep the lid on it and I expect the Competition Commission to savage them.

Is that the noise of shredding I can hear?

Quick update on the videos for the website that I mentioned two blogs ago. You can now see some of the videos up on the website and YouTube.

It’s not easy watching yourself back when you are not used to it, but I hope folks find it useful!

That’s all for now,

John