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BETWEEN 2013 AND 2016, the cost of car insurance increased by 70%.
Last year, the government published a report with a number of recommendations on what needed to be done to bring premiums down. The statistics point to a reduction in the last year, but not all drivers are feeling the benefits.
TheJournal.ie spoke to a number of drivers who said their premiums had risen for this year, and in some cases by a large amount.
We’re a year on from this report now, so how far are we away from a wholesale drop in the cost of car insurance?
The plans
Then-Minister of the State Eoghan Murphy said at the start of the report that “there is no single policy or legislative ‘silver bullet’ to immediately stem or reverse premium price rises”.
However, Murphy also said that all stakeholders should be able to work together so that “fairer premiums” for consumers could be brought in “without unnecessary delay”.
Its “action plan” contained a number of recommendations including:
This personal injuries commission would seek to establish a “standardised approach” for the examination and reporting of soft-tissue injuries such as whiplash.
By quantifying and clarifying payments made in claims, and developing better detection of fraud, it was envisaged that these savings made by insurance companies could be passed on to the consumer.
Reducing cost for the consumer was, of course, a main objective for this report.
According to the CSO’s Consumer Price Index for November 2017, the cost of motor insurance is going down, decreasing by 9.3% on the same period in 2016.
Up to that period, however, premiums shot up. Some customers saw their car insurance costs jump by up to 60% in the two years prior to that, and by a third in 2016 alone.
Still going up
In a statement to TheJournal.ie, a Department of Finance spokesperson pointed to the decreases in the cost of car insurance premiums since the July 2016.
They did add, however, that “while the CSO statistics indicate a greater degree of stability on an overall basis, these figures represent a broad average and therefore there are many people who may still be seeing increases”.
One taxi driver that we spoke to said that their premium, due for renewal this March, went up by one third last year, to over €2,000, last year despite not having made any claims in a number of years.
Other drivers we spoke to, in their 20s, 30s and 40s said that their insurance premiums have risen for the most part.
One man in his mid-20s, who’s been driving since the age of 18 and has never made a claim, recently got a quote from his insurer for €150 more last November. It was a similar case for a woman in her 40s, whose premium was quoted for €100 higher last October.
However, another woman in her early 30s told us that, while she was quoted a higher premium with her current insurer, she was able to secure a quote paying the same price with a different insurer.
Progress made
Insurance Ireland CEO Kevin Thompson told TheJournal.ie that while much progress has been made in the year, there is still work to be done before wholesale reductions in premiums can be passed on to customers.
He referenced the establishment of the personal injuries commission, which is looking at systems of benchmarking compensation awards to try to bring costs for the companies down which can in turn be passed onto consumers.
“The personal injuries commission has a twofold objective,” Thompson said. “It’s standardising how they’re assessed, and it’s the benchmarking of awards.”
Insurance companies have given over a lot of data to the Department of Finance on claims paid from 2015, 2016 and 2017.
He said that the increases to premiums in recent years was tied in with the sheer amount of claims being brought forward, particularly those that end up in court.
Furthermore, there was a recommendation for the Personal Injuries Board to be given more powers. While the government has brought the heads of bill forward for legislation that would do this, it may take some time.
“The timeline for us is important,” Thompson said. “That’s unknown at this stage. The ultimate aim is getting more claims to go through this injuries board, and out of the litigation system.”
Deirdre Ashe, director of personal lines at Liberty Insurance, said that the company largely supports the personal injuries commission’s aims to bring compensation payouts for soft tissue more in line with European norms.
She said: “They have also fuelled our high level of fraudulent claims, with the motorist paying the price through increased insurance premiums. The commission’s role to date in tackling this area of reform is positive.”
Ashe added that managing the expectations of claimants needs to improve.
While pointing to the 9.3% drop in the cost of insurance in the past year, as per CSO figures, Thompson said that figure was welcome but not indicative of a complete change in the system.
“It’s fair to say that we’re at a new norm, in terms of the cost of insurance out there,” he said. “If we want to tackle it, it’s the cost of awards we need to look at.
2018 should be the year of action. The only risk is concerning legislative change, when you look at the current speed that is happening. The longer that takes, the longer it will be until consumers feel the benefits.
Next steps
The Department of Finance spokesperson said that quarterly updates are to provided on the progress being made towards the recommendations in the report.
They said: “The fourth quarterly update is scheduled to be published within a few weeks and will focus on the 14 actions which were due for completion in the final quarter of 2017. It will also contain a summary from each department/agency outlining the key achievements completed during 2017 overall in respect of implementing the report’s recommendations.
It is hoped that the ongoing implementation of the Motor Report, in addition to the implementation of the working group’s forthcoming report on employer and public liability insurance, will make a difference to the pricing of insurance premiums.
While the subject matter of this second report does not relate to motor insurance directly, recommendation in this second report in relation to liability insurance should have an impact on the cost of insurance as a whole.
Underlying problems
Fianna Fáil’s finance spokesperson Michael McGrath, however, accused the government of having “no interest in halting the dramatic hikes in premiums experienced by motorists for the preceding few years”.
He said that, a year on from the government’s report, greater progress is needed “on the key issues of award levels, insurance fraud and transparency around industry data”.
“Younger drivers and drivers with older vehicles continue to be charged huge premiums if they are able to get a quote at all,” McGrath said.
According to recent CSO figures, aggregate premiums have come down and this has led some into thinking that the underlying problems are being solved. However, many people are still facing massive insurance hikes and serious problems remain.
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Government will increase their levy on fuel and motor tax to “assist” young people making the decision to reduce car usage. They won’t be able to afford to use their cars.
@David Corrigan: actually most do feel the need to reduce their environmental impact unlike the boomer generation.
@Brendan Cooney: The majority of people will do their bit to help. But the wrong areas are being targeted.
@David Corrigan: hahaha a likely story….. 18-24 year olds driving electric cars – do they even realise they’re gonna have to get jobs, pay taxes and levies, exorbitant rents/mortgages, rip off prices everywhere and then more rip off prices for EVs – I’ll believe it when I see it!!!!!!
@David Corrigan: which will be the dearer in the Futher a electric car or a box flat ha electric cars are only for moving the exhaust to chimleys to a different location Ireland needs nuclear ,
@Nora McElhinney: Our young people will be priced out of owning a home or a car within the next few years. Some existence to look forward to eh?
@Brendan Cooney: “actually most do feel the need to reduce their environmental impact unlike the boomer generation.”
You mean your own generation.
Electric cars (1) still use power coming from the same environment damaging power stations and (2) their huge batteries that are in the floor of cars, are currently unrecycleable.
* Also Journal, why is another news item currently locked up? https://www.thejournal.ie/hse-accountability-paul-reid-5601488-Nov2021/#comments – This is becoming all too regular with the Journal. No legal cases involved with that now censored comment section.
@UnitedPeople #StopCETA: 1. With increasing renewable power coming on line that excuse is becoming moot. 2. Actually they are recyclable.
@UnitedPeople #StopCETA: it’s interesting your first statement is half right and your second is completely wrong. All cells manufactured for years now have been 100% recyclable or reusable in other applications. In regards to fossil fuels, taking your energy from scrubbed emissions sources is a hell of a lot better than taking it from a tail pipe, but I do agree we need to do better.
@Sean Mac Gabhann: genuine question, can the batteries be recycled into car batteries again? Or do they get turned into something completely different. The whole “100% recyclable” can be miss leading at times as I understand it, they generally get down graded as they get recycled each time.
@Joshua Walsh: the batteries can be recycled. However when they get to a point they are no longer usable in a car they are still quite useable in others applications like home storage or massive battery banks for the grid extending their lifespan by another 20 years or so.
@Joshua Walsh: “can the batteries be recycled into car batteries again?”
Study on that recently (Recycled cathode materials enabled superior performance for lithium-ion batteries), “Here, we demonstrate that the recycled LiNi1/3Mn1/3Co1/3O2 has a superior rate and cycle performance, verified by various industry-level tests”
Just conducted a similar poll this morning on twelve, 18 to 21 year olds.
70% are car drivers.
Quick result: zero plan to either reduce their number or journeys or change their vehicle similar to question asked in the above poll.
Now, to be honest I didn’t need to run this quick poll to call complete BS on the one above.
@Gavin Linden: exactly: the article is pure GP/D4 nonsense. No young person I know is even contemplating EV. Quite the opposite: they all seem to want an IS200 :)
@John Moylan: And fair play to them, posting videos of them attempting donuts in a Prius or a Leaf just wouldn’t have the same level of being interest.
@Gavin Linden: like to know where the 18-24 year olds will get the money to change to an EV from??? Must be a D4 south side poll conducted.
@Gavin Linden: 12 people isn’t really a valid sample size.
No homes and now no cars up the Greens , village can have a couple of cars and then in the mornings the natives can have a bicycle race to the central car park , first there gets car and can go to work , problem solved by Mr Ryan
They won’t be able to afford the cars and then won’t have anywhere to charge them either and electricity is in short supply ..no infastruture set up its BS ..
@Elizabeth Eccles: Electricity is NOT in short supply. Still lots of excess capacity at night which is why night rates exist.
74% of 18 to 24 year old’s would say anything!
I’m 48. Italian. Our generation grow up with the car should be fun, on a first place. Thinking back all the Ads and the mostorport of the 80s and 90s.
Sadly not anymore. Yougest generation don’t care, they consider more fun stay on facebook, rather than the feeling of 100CV revving…
I’m sorry for them. I’ll let them drive a vacuum cleaner, I’ll still enjoy my rare, classic Alfa 75….. :)
@Proudly Italian: I dunno, I was behind an Audi E tron the other day. Do you know when the Starship Enterprise goes into Warp speed? It was like that!
@Proudly Italian: “the feeling of 100CV revving… I’m sorry for them. I’ll let them drive a vacuum cleaner”. Easy enough sort that, play Engine_Revving_MP3 then stomp on the accelerator to enjoy the better electric acceleration.
Are they going to have their other 4 housemates/ parents pay for the electricity?
Great to see the younger generation leading the way unlike the auld lads and dears who frequently come on here whinging “on their behalf”. #timetochange
@Brendan Cooney: They will have no choice. They won’t be able to afford to do the things they want.
@Brendan Cooney: i actually think your wrong,i think older people are taking the lead albeit quietly in there own way to protect the enviroment.
I’ll believe that when I see it. Young people are full of great intentions when it comes to the environment but don’t give a second thought to buying cheap throwaway tat in the likes of Penney’s or using one use cups in the like of Starbucks.
I’m 29 and considering the switch to an EV. Where do I fit in ?? Old.. young..
Old
There are currently approx 1.2 Billion cars globally.
Production capacity is around 95 million
Total EVs in the world approx 7 million.
I know EV production will probably increase exp’lly but will Ireland have 1 EV million by 2030?
@Anarch Eco: Government actively penalising business ownership of EVs.
Recent budget added back BIK previous budget removed SEAI grants for businesses.
Because EVs are more expensive BIK will be almost as dear as a diesel equivalent. Eg. A EV Kona is nearly 40% more expensive than a petrol Kona so BIK will be almost as much for a locally much cleaner car.
@Gavin Tobin: Doesnt make sense at all.
Company cars are a good source for the secondhand car market too.
Wana get around? Need a car. Cheapest way? Diesel. Great plans these, shame they’re not reciprocated in reality.
If FAME was reduced from diesel, it would be a far cleaner product!!!! All diesel now has ultra low sulphur content … Diesel is much cleaner than it was twenty years ago..
FAME does more harm than good to diesel engines… it keeps the garages going with replacement filters and egr valves!!!
Total cost of ownership of various EVs in Ireland:
https://www.seai.ie/technologies/electric-vehicles/compare-and-calculate/?gclsrc=ds&order=1
You’ll find when adding up all costs, EV driving will generally work out cheaper than ICE driving for equivalent car types over the lifetime of the car, even though EV purchase costs are higher.
have your say