Will the insurance industry have to pick up the bill for increased vehicle removal charges?
At the current cost of around £50m per year, the insurance industry is certainly bearing the brunt of vehicle removal charges. But the proposals to increase the charge for removal – from a flat rate of £105 up to a massive £8,400 in the worst cases – will surely have a huge impact on this figure.
Also, the ABI’s £50m figure only accounts for police-instructed vehicle removals, usually where a vehicle has been abandoned (for example, after it has been stolen) or parked in a dangerous place (which results in removal from the kerb and storage in a police car pound).
Yet there will be occasions where the police aren’t involved in instructing vehicle removal, yet the costs are borne by the insurer under the terms of the policy. This could cause the £50m figure to jump further.
All in all, there is no question that the insurance industry will pick up the tab if the new charges are implemented. Considering the already soft motor market, this will not bode well for premiums – which the Home Office accepted will most likely need to be increased as a result.
Obviously, insurers will receive no additional benefit from increasing premiums in such a manner, and consumers will not be impressed.
