Anger as report reveals motor insurance costs

A road crash can have big financial impact - but this new evidence suggests the insurance firms that are supposed to protect us...are engaged in a system which actually adds to the costs. Drivers paying ever increasing premiums will be angry.

Today we spoke to one in Darlington who now pays double in premiums what her car is actually worth. She was livid when we showed her the contents of today's OFT report.

Fair trade officials found that the insurer of the driver not to blame can get referral fees and rebates - which lead to repairers and hire firms inflating charges. It adds an average £10 to every motor premium.

I spoke to the insurance industries spokesman (Association of British Insurers) who says he accepts things are going wrong - but insists its not all their fault. He says that hire firms, brokers and all sorts of intermediaries also have their hands in the system. He also says they can't put their own house in order because so many different sectors are now involved. How very un-reassuring.

Motor insurance is a lucrative £9.4 billion pounds a year market - with premiums rocketing by at least 20% in 3 years.

Government has promised motorists insurance firms will be banned from selling information in personal injury cases. But today's findings suggest that does not go far enough - it would still allow these practices. For years insurance firms have blamed motorist fraud, fake whiplash and bad driving for rising premiums.Today's report suggests they themselves have been responsible for millions ofpounds of inflated costs all in the name of increased profits?