Rents rise again as car insurance costs ease from elevated levels

Rents continued to rise in August but the costs of insuring a car fell slightly from their elevated levels, the latest consumer price index figures show.

The CSO said the overall cost of living for the prices of all the goods and services across the economy fell 0.2% in the month and are now 0.1% lower than August 2015.

The prices of many goods and services across the economy have been moderate or falling for some time reflecting lower oil prices and the lack of wage inflation, despite the gradual pickup in the economy.

However, the outstanding features of the cost of the living basket for over a year have been soaring rents and motor insurance.

With a significant increase of 0.7%, private rents showed little sign of easing up in August, and were 8.9% higher than a year earlier.

Local authority rents, although unchanged in the month, were 5.5% higher in the year.

Other costs associated with housing were significantly lower.

The costs of mortgage interest payments were unchanged from July but were 6.4% higher in the year, reflecting the cuts by some lenders in their standard variable mortgage rates.

Electricity and gas costs were 6.1% and 2.4% lower in the year, but home heating oil fell much more sharply, by 13%.

Meanwhile, the costs of insuring a car fell by 0.9% in August, but were 28% higher than in August 2015.

Of all the 53,000 prices sampled by the CSO across the State, the cost of motor insurance has risen by the fastest in the past year.

The insurance industry has argued that the high levels and cost of claims justify the increases, while business and consumer groups have said that the motor premium price hikes need to be reined in.

“Unjustified increases in business costs are stifling growth in the Irish economy,” said Mark Fielding, chief executive at business group ISME. “Excessive rises in motor insurance, legal fees and bank charges are causing a rethink on business growth plans which has a negative effect on job creation.

“Increases of 35% and over are common in general insurance while motor insurance premiums are in some cases double that — 97% of respondents to the ISME survey have had increases imposed.

“The Government have allowed the Insurance industry to charge what they like, in a broken market where investigation and intervention is necessary.”

Insurance broker yesterday said it supported the idea of abolishing cash payouts for whiplash, and to pay instead for claimants’ medical bills.


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