Insurers face tens of millions of pounds in extra costs in the recovery of damaged vehicles
A leaked Home Office document has revealed that insurers face tens of millions of pounds in extra costs in the recovery of damaged vehicles.
The Home Office is consulting on a new set of fees for vehicle recovery, which already costs the industry £50m a year, according to the ABI.
Under the proposals, which are out for public consultation until 25 January, the existing flat-rate charges of £105 per removal, £12 per day for storage, and £50 for disposal would be replaced with 23 fee bands ranging from £150 up to £8,400.
This would mean a minimum hike of at least £45 per vehicle, and potentially much more.
This could force insurers to raise motor premiums.
Ministers have agreed upon 23 different scenarios according to vehicle type, condition and location, but are currently consulting on the charges associated with each.
The original consultation paper admits that the new charges will impact directly upon insurers.
The Home Office says it wants to replace outdated recovery charges that do not give a fair deal to vehicle recovery companies who, on police instruction, recover vehicles that are illegally, obstructively, or dangerously parked, abandoned or broken down.