The cost of motor insurance - Transport Committee Contents

6  Conclusion

53. Although the Government is not responsible for the cost of motor insurance there are several good reasons for it to be concerned at the recent increases in premiums for what is a compulsory requirement on drivers and we have identified a number of actions it can take to help bring premiums down. In particular, the Minister pointed out that other departments are responsible for issues such as referral fees and action against insurance fraud but we look to him to press the case across Whitehall for the measures we have recommended. Within his own remit, the Minister has already acted decisively to help reduce uninsured driving. We now look to him to turn his attention to making the driving test more rigorous and bringing down the casualty rate amongst young drivers, something which in our view should be central to the Government's forthcoming road safety strategy.

54. The insurance industry also has a big part to play in bringing premiums under control. If referral fees continue they should be more transparent. We are not convinced that the increasing prevalence of referral fees throughout the sector has left premiums unaffected and we suspect that the market will be less "dysfunctional" if consumers have a better grasp of where their money goes. We would also like to see the insurance industry do more to tackle fraud. The Department for Transport should bring pressure to bear on the main players to work together, and with the police and other authorities.

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