Bid to cut car insurance premiums

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Driving

The competition watchdog is proposing to impose a cap on replacement vehicle costs following motor accidents as part of a clampdown to help cut premiums for all drivers in the £11 billion private motor insurance market.

The Competition and Markets Authority (CMA) said the cap on charges passed to the insurer of the driver who is at-fault in an accident for the cost of providing a replacement vehicle to the non-fault driver, would "more closely reflect the costs incurred and remove significant inefficiencies".

The watchdog has previously found that the "complex chain" of claim costs following an accident collectively inflates premiums by as much as £200 million a year.

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