In last week’s Dail debate on Insurance Costs, Finance Michael Noonan said motor insurance premiums increased by between 20% and 35% in the past 12 months.
He linked this to increased frequency, scale, and cost of claims.
Claims costs were higher due to factors including increases in court jurisdiction, increased engagement of solicitors in claims, and a recent High Court ruling that has reduced the discount rate in catastrophic injury awards.
Uncertainty over court awards may also drive claims inflation.
The high levels of insurance fraud and of uninsured drivers also add to insurance industry costs.
All of these costs are fed back to consumers through increased insurance premiums.
A review of insurance sector policy is being undertaken in consultation with the Central Bank of Ireland, with the objective of improving the functioning and regulation of the insurance sector.
Limerick County Fine Gael TD Tom Neville said, “The rising cost of insurance will drive more young people from rural areas into the cities and towns, where there is more frequent and elaborate public transport.”
He gave the example of a lady driver constituent whose best insurance quote was more than €6,000 on a 2005 1.9l diesel car with a full licence, and one year as a named driver on her parents’ policy .
“This constituent wants to pursue farming and settle in a rural location, but is being priced away from the area.”
Laois Sinn Féin TD Brian Stanley said where little public transport is available, and a car is necessary for work, young people throughout Co Laois and south Co Kildare are being priced out of their jobs.
“Many of them are on low wages and need a car because there is no public transport.”
“Furthermore, the significant cost increases on commercial vehicles are often being offset onto small businesses and the result of this can be job losses and non- expansion of companies.”