Measures to achievecheaper car insurance premiums for drivers are being considered by the competition watchdog.
Car insurance companies initially foot the bill during the claims process after an accident, but it does ultimately lead to higher premiums for motorists, according to a probe by the Competition Commission.
Alasdair Smith, who is leading the investigation for the watchdog, said "there is insufficient incentive for insurers to keep costs down" given that the party usually managing the claim is the non-fault insurer or intermediary.
The separation of control and liability on replacement cars and repairs amounts to between £150 million and £200 million in extra premium costs a year, the commission estimates.
It is therefore looking at the possibility of making a driver's own insurer responsible for providing a replacement vehicle or to give at-fault insurers more opportunity to take control in the management of claims.
There is also the prospect of a cost cap on replacement vehicles and repair costs after the watchdog found repairs after an accident are not up to scratch in too many cases.
"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," said Mr Smith.
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