CAI urges probe into motor insurance hikes

The Consumers’ Association of Ireland (CAI) has called on the Government to conduct an independent review of the insurance industry amid growing concerns that motor insurers are penalising pensioners and younger drivers who tend to drive older cars.

Allianz and Aviva have already said they will no longer insure new customers with cars more than 15 years old and there are increasing signs that other insurers are raising premiums for their clients with older cars.

Cork City councillor Mick Barry said he is receiving reports of huge hikes in motor insurance premium quotes for people driving cars that are 15 years old or older.

Mr Barry, a member of the Anti Austerity Alliance, said he has evidence of massive price hikes and gave the example of a constituent who was recently quoted €610 for a year’s third-party fire and theft insurance on a 1998 car but who was charged €329 on the same car last year. The car had passed the NCT test and the man had held a licence for 50 years with no penalty points and had a full no-claims bonus.

“This is profiteering by the insurance industry,” said Mr Barry.

“Cars that are more than 10 years old must be NCT’d every year. If a car has passed the NCT it is officially safe to drive and insurance companies should have no right to demand increased insurance premiums on such vehicles let alone price hikes verging on a 100% mark-up.”

Mr Barry, the former Cork organiser of the Motor Insurance Justice Action Group, which campaigned for fairer car insurance rates for young drivers in the early 2000s, said the approach being taken by insurance companies would disproportionately affect younger drivers, older drivers and those on low incomes.

He said: “Many drivers of older cars are younger drivers who cannot afford a more recent model. Some are older drivers who make only limited use of the car. The insurance industry is treating these groups very unfairly with this new approach.”

Dermot Jewell of the Consumers Association said he has written to Enterprise and Jobs Minister Richard Bruton to outline his organisation’s concerns. The CAI wants the Motor Insurance Advisory Board, which investigated the industry in 2002, re-established to conduct a further review.

The first report of the MIAB was published in April 2002 and contained 67 recommendations in relation to the motor insurance industry. The report revealed that between 2001 and 2002 average premiums increased by up to 30%.

Mr Jewell agrees that profit appears to be behind the latest targeting of older cars by insurers: “I think they are doing everything they can to regain profits lost in recent years but that should not be totally at the cost of the motorist.”

“We are running into a situation where a motorist can be put off the road for no other reason than they simply cannot afford it and it is the younger and older drivers who are most affected.”

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