Insurance: a competitive market?

From the number of unsolicited offers I receive whenever my house or car insurance is due (how do they know?) there's plenty of allegedly competing firms in the insurance market.

It is part of Tory philosophy that competition between private providers is the best way to ensure that the customer receives the best possible deal at the best possible price, and that interference from the government, or regulation (the famous "red tape" that they are so dedicated to cutting) can only hinder the efficiency of the market.

Why, then, has the government found it necessary to summon the bosses of the  insurable companies to Downing Street to ensure that the sufferers  from flooding are treated properly?  Is it just a PR stunt , or,  when it comes to the crunch, do they have no confidence in their own market dogma?

Economic right-wingers are fond of quoting the great Adam Smith in support of their doctrines.  Perhaps, at heart, they agree with him when he recognises the need for market regulation, as when he writes: "People of the same trade  seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."  (The Wealth of Nations, page 116, Everyman's Library edition)

One contrivance to raise, if not their prices, at least their profits, is the apparently universal practice of the insurance companies of providing  only premium telephone numbers for claimants to contact them on.  This is a disgraceful extra imposition on people already suffering from huge  inconvenience, stress, and probably ultimately, financial loss. Claimants can of course avoid this charge by using the http://www.saynoto0870.com/search.php website, but it would be a helpful touch if at least some of the companies sharpened their competitive edge by publishing non-premium landmine numbers up front.