A UK watchdog has revealed it’s plans to clamp down on deals between car insurers and price comparison sites this week. An investigation by the CMA (Competition & Markets Authority) has revealed that some of the contracts between insurers and comparison websites included “price parity” clauses, meaning that insurers aren’t able to make their products available at a cheaper price, either direct or through other platforms.

The concerns surrounding this practice are that it restricts competition and will eventually lead to higher insurance premiums.

The CMA are also calling for better information about any “add-on” products that may be being sold alongside car insurance. There is a particular concern about the sale of no-claims bonus protection. The aim for the CMA is to make sure consumers are getting as much information about exactly what they are purchasing so that they can make a more informed decision.

The Financial Conduct Authority warned of their plans to ban insurers from automatically sell add-ons along with insurance deals in July this year. This came about after they revealed that customers were over-spending by up to £200m a year in add-ons.

According to one insurer, the AA, the individual could knock £20 off their yearly bill with the new measures in place. For those who shop around, this is just more good news as the average cost of comprehensive cover has already seen a drop of around £200 in just the last three years.

“While of course we welcome any measures that help to contain consumer costs and improve transparency, there remains much greater scope to reduce costs by continuing to tackle the tide of insurance fraud” explains Managing Director of AA Insurance Janet Connor explains.

“For example, attempts to exaggerate or make false whiplash injury claims cost up to £90 per policy. This remains a considerable burden on insurance companies but it was outside the remit of this inquiry.”

Claims such as whiplash and other personal injury claims have not been touched upon by the CMA as the Government already has plans underway to clamp down in this area.

However, despite the news of the comparison site clampdown saving consumer spending and increasing transparency, the watchdog has been criticised by the ABI (Association of British Insurers) for backtracking on their proposal to cut the cost of providing replacement cars and repairs by insurers of the driver who was not at fault. An investigation by the CMA revealed that the insurer of the ‘not-at-fault’ driver is responsible for arranging replacement cars and repairs at the expense of the ‘at-fault’ driver which has led to higher costs for such services and ultimately, higher premiums for all drivers.

Despite looking into several different solutions to this problem, the CMA found that any significant remedies would require a change in the law.

CMA representative Alasdair Smith said: “Reluctantly we have had to conclude that we cannot see an effective way of addressing this problem fully short of a fundamental change in the law and, while this problem does increase premiums for motorists, the extent of the problem is not as high as was at first envisaged and does not warrant such a radical measure.”