How the police get a bite out of your insurance premiums

Cars sometimes breakdown, cars are sometimes involved in accidents. When the police come out to investigate they quite rightly want to get the cars off the road as quickly as possible so they phone up companies that have sufficient equipment to get them towed or carried away and stored until the insurance companies involved can finally get at them.

So far, so good. However, certain police forces don't ring up the company which is nearest to the vehicle, or even the company with the best equipment for shifting this vehicle. They ring up particular companies with which they have commercial arrangements, and which pay them a fee.

And this is not a small fee either. Rumour has it that the West Midlands police force, claimed to charge £25 per vehicle, received approximately £1.3 million in two years from grateful recovery companies. Needless to say, these fees plus 'handling charges' and storage fees were eventually passed on to the insurance companies, who then passed on the cost involved to the policyholders in the form of increased premiums.

To their credit, the Metropolitan Police and Strathclyde Police do not make a charge for this; but a number of police authorities have refused point blank to divulges any figures about what they earn from this business, in the case of Greater Manchester Police and Merseyside Police citing commercial confidentiality. Commercial? What are the police doing getting involved in commerce?

Recovery companies are overjoyed with this type of business; not only do they have a guaranteed income from insurance companies, but when an injury has been involved they can sell on the information to claims handling companies, often for hundreds of pounds, and to credit hire companies that provide vehicles on loan to people whose own cars have been damaged in an accident. The cost of all these sidelines, naturally, fall onto the insurance company and then, ultimately, the policyholder.

Insurance companies do of course have their own contracted garages that take in and repair, or dispose of, their insured vehicles. If the police were to inform insurance companies when a car needs to be moved (the information is all there on the motor insurers database, which the police access thousands of times a day) those insurers could then inform their own garages to collect the vehicle. Instead of which, the car is picked up by another contractor who takes it to a store, and then the insurance company have to pay this contractor for collecting the vehicle and storing it as well as any 'commissions' that have been paid to the police force, as well as the cost of having it collected again and delivered to their own approved garage.

With so many getting bites out of the cherry is it any wonder that car insurance premiums are so high?

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