Motor insurance premiums are now expected to jump by at least 30 per cent this year, according to The AA. Motorists in Ireland have already been enduring a 20 per cent price hike so far.
The AA sells motor insurance as an intermediary and as such, deals extensively with insurance underwriters. With 170,000 Irish motorists insured, the organisation has a detailed understanding of where prices are trending. “It’s the year from hell for insurance prices, and its getting worse,” says Director of Consumer Affairs, Conor Faughnan. “We understand some of the reasons but others are less clear.”
The higher costs come amid a rise in claims but, according to the AA, this is not the sole reason for premium hikes.
“We know that there is more traffic on the road which adds to risk but not enough to explain price rises this large,” says Conor. “We also know that the insurance industry collectively has been charging too little for insurance over a number of years. That was not sustainable and some element of correction is needed.
“But it’s not fully clear how much the cost of each individual claim is going up by and this is where insurers need to be more open with their data,” adds Conor.
An increase in the maximum personal injury award to €60,000 that can be made by the Circuit Court has appeared to prompt more people to make their case through the court system.The AA is now calling for a fuller sharing of information by insurance companies related to the cost of the claims they are settling.
“We are being told that the industry is seriously worried about an increase in the typical injury award,” says Conor. “However, it would help everyone to understand that if insurers produced data to prove it. We know of recent individual cases where awards appeared extremely high, but we need more than anecdotes and examples.”
Meanwhile, the ongoing problem of fraudulent claims has been adding between €50 and €60 to each individual policy, claims The AA. “One factor we are sure about is fraud,” says Conor. “A tougher stance on the part of the Government is necessary, as well as the enabling of better Gardaí detection resources. It is not fair to expect ordinary motorists to keep paying for the cost of chancers and fraudsters.”