Car insurance premiums are too high and should be reduced through far-reaching reforms, the competition watchdog said today.
The Competition Commission believes that too many drivers are footing the bill for unnecessary costs incurred during the claims process following an accident.
These costs are initially borne by the insurers of at-fault drivers, but they feed through into increased insurance premiums for all drivers.
The watchdog is also concerned about the relationship between price comparison websites and insurers.
Alasdair Smith, who is leading the investigation, said: "We are now considering a range of possible measures, some of them far-reaching reforms, to ensure that the market better serves the interests of customers."