40% insurance hike for motorists within the last year

Car insurance premiums increased dramatically by almost 40% within the last year, as motorists struggle to afford to keep their vehicles on the road.

Central Statistics Office figures showed an insurance jump of 38.6% in June, compared to the same period last year.

Premiums, generally, have shot up by almost 70% in the last three years.

The insurance sector is blaming higher levels of claims, more people using the courts to seek compensation and low levels of reserves in the industry for the hikes in premiums.

The latest figures led Insurance Ireland to again call for action to be taken to address the spiralling cost of claims. The group pointed to the annual report of the Courts Services this week which detailed double-digit increases in awards made by the courts last year.

Kevin Thompson, chief executive of Insurance Ireland, said the increases in the level of awards and the frequency of awards have created a volatile claims environment.

“We have to get costs under control to bring stability to the market,” he said. “For instance, just this week the Courts Service said that in 2015, the average Circuit Court award increased by 21.2%, following a 13.5% increase in 2014.

“This is as a result of the change in the jurisdiction limits in February 2014. Higher court awards impact on all claims in the system by creating an incentive to pursue a claim to litigation.”

In June, Fianna Fáil passed a motion calling for the introduction of practical measures such as the re-establishment of the Motor Insurance Advisory Board on a time-limited basis, greater disclosure around policy renewal notifications, action on the settlement of cases and dealing with false and exaggerated claims.

The Motor Insurance Advisory Board was set up in 1998 and, in a 2002 report made 67 recommendations to deal with soaring insurance costs.