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THE WAY OFFICIAL CSO stats on the cost of car insurance are compiled leaves it “open to the industry to knowingly present certain figures that may not reflect the full picture”, Sinn Féin’s Pearse Doherty has claimed.
CSO stats say that the cost of premiums has fallen in the last few years, but that isn’t being felt by many customers, Doherty said.
The government is yet to implement many of the recommendations from the Cost of Insurance Working Group it set up – such as dedicated garda unit to tackle insurance fraud. The opposition claims the public is being left out of pocket because of this inaction, with the official stats provided not reflected on the ground.
CSO figures
According to most recent Consumer Price Index for January, the average cost of motor insurance had fallen six points in the previous 12 months.
In a recent parliamentary question, Doherty asked the Taoiseach the way in which the CSO acquires data on the price of motor insurance.
In reply, Varadkar said that to compile that particular index as part of the overall Consumer Price Index, the CSO collects data on premiums from a sample of insurance companies.
“The sample covers approximately two-thirds of the motor insurance premiums written in the market,” he said.
The insurance companies are requested to supply price quotations for defined customer profiles for both new and existing customers. This request is made monthly via email from a member of the CSO’s CPI team directly to a representative of each of the insurance companies in the sample. As with all companies contacted directly for information used in the compilation of the CPI, the CSO team members identify themselves.
The Taoiseach added that the CSO keeps the profiles regularly updated so they can continue to be representative of the market, collating characteristics such as model and age of the car, and the sex, age, location and occupation of the insured person.
Doherty said that a “more detailed and robust way of checking the actual prices is warranted given that the public continue to report large increases”.
For example, a survey of 4,000 motorists from the AA last year found that 56% of those polled said they’d seen a significant increase in their car insurance at the time of renewal. This dataset, however, would be smaller than that available to the CSO.
The Sinn Féin finance spokesperson said he questioned whether the insurance industry could be relied upon to provide “straight up data” when approached officially by the CSO and asked its prices.
“The CSO approach is fine for the price of milk or nappies – or most products – but insurance is a notoriously difficult product to price which varies widely from person to person and place to place seemingly without rhyme or reason,” Doherty said.
“Through an FOI request I have obtained documentation which shows an industry commissioned report actually disputes the CSO’s figures of a large increase arguing that in fact prices only increased by 22% between 2011 and 2016.
At the very least, Ministers quoting these figures should be more circumspect given their ultimate source is the insurers themselves.
Reacting to Doherty’s claims, a spokesperson for Insurance Ireland told TheJournal.ie that it has “always accepted the veracity of the CSO process and considers its data to be indicative of market conditions”.
“This was a view shared by Deputy Doherty when he relied on the index in Dáil contributions when premium levels were increasing,” the spokesperson said.
The report Deputy Doherty refers to was supplied to the Government’s Cost of Insurance Working Group by Insurance Ireland and it stated that it is not correct to directly compare the increases it found in premium levels (22%) with the CSO index. The purpose of this comment in the report was to avoid inaccurate interpretations such as those put forward by Deputy Doherty.
The spokesperson added that “systemic reform” is needed to address the “volatility of claims” which helps to drive the cost of premiums upwards for some drivers.
“We want to see greater urgency in the pace of reform to tackle the costs all policyholders pay,” the Insurance Ireland spokesperson added.
Cost of awards
On a repeated basis, the level of compensation payouts for injuries sustained in road collisions has been cited as a chief cause in the high cost of premiums in Ireland.
A report from the Personal Injuries Commission last September found that the average claim for soft tissue injuries in Ireland was €19,862 – over four times higher than the average in the UK
Speaking to TheJournal.ie last year, insurers told us that the cost of paying out these claims out, as well as the expectation that some people have regarding the payout they may receive.
Insurance Ireland CEO Kevin Thomson said: “It’s fair to say that we’re at a new norm, in terms of the cost of insurance out there. If we want to tackle it, it’s the cost of awards we need to look at.”
In one recent case that took place in Dublin, a young driver now fears his premium could skyrocket after being involved in a minor crash where the driver of the other car has now claimed an injury.
John* told TheJournal.ie that it was during morning rush hour when he drove into the back of another car at a relatively low speed.
“It really was only a tip,” he said. “It was a busy city centre street at rush hour, you’re not going to be going that fast.”
He said that none of the occupants of either of the cars reported injuries at the scene, but the driver of the other car subsequently submitted a claim.
John said: “And my insurance company just said they’d pay him out straight away. I think the photos show how little the impact was.
That’s my no-claims gone now, and my insurance is up for renewal in the summer. As a young driver, my premium was high anyway. But depending on how high it goes it might force me off the road.
In regards to injury payouts, there may be some move from government in this regard, with Minister for Justice Charlie Flanagan last month asking the Chief Justice of the Supreme Court Frank Clarke for help in efforts to bring down the size of compensation awards.
The Alliance for Insurance Reform called it a “welcome development” after “months of frustration at the pace of reform on insurance costs”.
Its spokesperson Peter Boland said: “Insurers can’t have it both ways – if the volume and quantum of awards are the problem then reform must be matched with cuts to premiums.
What we have not seen from insurers is a commitment to cut premiums if necessary reforms are made. A tangible commitment on premium cuts would provide an additional impetus on the government to act.
*Names have been changed at the person’s request.
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30 yrs driving without a claim ever (thankfully), no-claims-bonus for all of those (well, 9 yrs is the most they credit) and my insurance premium has doubled in those yrs. Definitely increased more than 21%. My car, while older, is very well maintained, has super low mileage (it sits in the driveway for most of the week) and passed the NCT with flying colours, first go. Matters none. Another €50 increase p/a. Reason given, my car is old. So why do they make NCT compulsory if has no impact on insurance? I did shop around but they are all in and around the same.
@Mandy Seiler: mine dropped this year .. you would wonder though.
@Mandy Seiler: the “age of the car” excuse has to be one of the more annoying things the insurance companies come out with. Does the NCT/DOE have any standing? If you buy a new car they charge more because of the value. You just cannot win.
@Mandy Seiler: Motorist = Golden Tit (Sir Jack Hayworth).
@Mandy Seiler:
Following on from your tale, robust! discussion my insurer as to why my insurance continues to rise, up over 80% in 5 years. Same reply age of car a factor, asked what is the point of an NCT then. Finally, gave in, bought a car 7 years newer with a smaller engine to be hit with an increased premium because it’s a newer car?
@Mandy Seiler: very similar story here mandy – driving 40 yrs -no accidents or points -clean licence , my car is also an older one but well maintained and passes nct first time every time — yet my insurance seems to go up year on year – same bullshit given about the car ‘being older’ yet each year i drop the ‘estimated value’ of the car by at least 5% – so if the car is worth less -the insurance would pay out less to replace it — makes no difference at all — most of the insurance companies here are subsidiaries of the 3 main banks (aib ,boi and ulsterbank) or an post , and they are also the ones that give the highest quotes .. why are we not allowed to avail of insurance from other eu countries ? thought part of being in the eu was to allow freedom of trade !
The insurance industry – a disgrace, run by a cartel.
@Only here for the comments: Insurance companies are only a carbuncle on the rump of society. Always were, always will be, just like their rotten bedfellows in the banking institutions.
@Only here for the comments: Doherty also questioned why the government charge a tariff if one taxes their cars quarterly when most now do it online
As usual no response
He is an effective politician who has the people living in the real world in mind
@Only here for the comments: I know of one accident.. Whereby the driver.. A healthy athletic
Man.. Tipped an elderly woman.. Claim he had injured his wrist.. The elderly woman was not even scratched…. The damage on his aged car did not correspond with the mild scratches on her car… The police were on the scene in seconds answering his call… In Dublin.. Gardener Street… Her defence in court was the same insurance Co.. As his… She was not allowed to argue her case. With the facts.. And this type of
Carry on seems to be the norm… Justice!
July 4th 2017
“Raids on main motor insurance providers over alleged cartel activity”
Not a dickie bird since. Why? What did they find? How about an update?
@Milk The Drones: Another regulator in name only and doing nothing
Am i reading this right, the CSO are relying on figures provided by the insurers to say insurance is getting cheaper all the while increasing premiums
Beggars belief, actually not
@Nicholas Kelly: yes it sounds they literally ring up X insurance companies, read from a script
“oh hi a a it’s Jimmy here from the CSO, could you tell me the insurance on a 50 year old in a fiat punto, a 25 year old in a Honda civic and an 18 year old on a vespa. Be honest now this is important because it helps us gauge if there is a cartel going on.”
Private companies once again running rings around Leo/Martin and CO.
@Dave.: They are not running rings around anyone, they are all mixed up in it together. The objective is to let companies and government rob you for every penny while you go out and vote them back into power to do it all again, they look at us as sheep, good sheep that a thick and do as they are told.
approach to new customers.
Basically they saw an opportunity to gouge money out of me. Anyone paying mostly installments, be careful about adding a temporary driver, the cost increase may not come back down when you remove them.
@Peter Denham: Half my comment vanished. Basically I added a novice driver to my policy which I pay by monthly installments which caused a significant increase. When I took them off the increase remained because they said there was no risk decrease.
@Peter Denham: Adding a driver for 3 weeks ended up costing me €300.
@Peter Denham: I know someone (with a full licence) who was advised to add their partner with a learner permit as a named driver and their insurance went down…………… I still have not worked that one out but I know it happened.
@Niall Ó Cofaigh: I actually went online and got two quotes with and without the novice and sure enough there was a difference of roughly €300. When I showed them they said that they assess risk differently for new customers. Also my renewal is significantly more expensive than if I cancel and take out a new policy with the same company.
@Peter Denham: Adding another temporary driver of my car costs me €25.
@Niall Ó Cofaigh: Fact, my non driving wife was on my insurance for years, as her provisional license had long since expired I went to take her off, yes you guessed it, premium went up a couple of hundred.
The state makes it obligatory to have 3rd party insurance, & then let’s a group of offshore outfits do the business.
A 3rd party insurance scheme should be applied by the state, via the motor registration office, with pre set graduated & termed ( not lump sums) injury terms, repair quotations as with any damage issue. Persons convicted of careless driving would have to bear automatic termed surcharging, as with the penalty points system, & cumulatively with recurring convictions.
The insurance business could continue to trade optional comprehensive policies to cover personal property, & incomes plus other benefits over the state compensation.
I got a quote of 460,driving 30 years in Dublin ,got 75 off when I gave an address in celbridge,same car same insurance the past 10 years,better off getting insurance of the the kinahihans,might be cheaper??
@Mark Plunkett: make sure you devalue your car accordingly each year
OMSP is what you will get if its a write off
@Quentin Moriarty: i devalue my car by approx 5% each year – makes no difference what so ever , if my insurance continues to rise by the same amount it has each year for the next 3 years – the cost of the insurance will be higher than the value of the car !
The cartel gouge new drivers and punish loyalty alike. The last two years my renewal quote virtually doubled for no reason but was able to get covered eventually for less than half that. Found Liberty way the best best this last time.
Part of the problem in obtaining “stats” is that the insurance industry does not seem to have any standard rates for anyone. Some time ago I was looking for a quote for my daughter starting to drive…. it was going to be expensive but one on line query got a call back after checking “21″ companies saying that only one company would quote and it was 2300…. well I already had a quote from my own insurance company of 1800 and when the call came in I explained that it was odd that they were telling me the my own insurance company would not take the business as I already had a quote of 1800 and I was testing the market to see was anything cheaper available… well the response was that the 2300 quote became 1800 but only valid for 24 hours – well when a company misleads you I loose interest….. so I went back to my own company with the car details, tuned the policy for practical needs and paid 1650 for the year…. No two policies are the same – for example windscreen cover does not cover side or back windows… what is the excess and other issues – so the CSO may see things different from the world real people live in…. .
Insurance is the business of selling fear of something that has not happened and in the unfortunate occurrence of an incident refusing to pay out.
@Ron: And if they do pay out you will end up paying for every cent of it with premium increases.
Personal injury of car insurance has to be taken over by the State like in Australia where
there are limits put on personal injury claims and where personal injury insurance is embedded in car regos.
For example: My Aussie car rego is $620 AUD (E396) includes personal injury
My Aussie comprehensive insurance is $405 AUD (E259)
Annual total: E655
My similar car in Ireland costs : Rego:E385
Mt Comp insurance costs:………………E1211
Total:……………………………………………E1596 which is E941 or 143% higher than OZ.
IMO, there are 3 factors leading to Ireland’s ridiculously high car insurance
(1) Fraudulent claims
(2) Unfettered court awards
(3) Rubbery figures by Insurers ( Ireland is effectively a tax haven so we are getting some of our own medicine back through Transfer Pricing ( see Apple Google etc)
@Moorooka Mick: Ah for fecks sake Mick…….. I cant’t add up all dose dots…………….. but you’re right on the insurance bits.
@Moorooka Mick: Here in Bulgaria basic 3rd party insurance is state controlled through selected brokers. Basic 3rd party insurance is 200 Leva per year that’s 100 euro. The vehicle is insured and anyone with a full licence can drive it without being named on the policy. You need to have the car documents with you. If you want or need better cover you go to a broker and pay.
Car tax is by way of vignette, from a week to a year. If you only use the car in your local area, you need no vignette.
As for the CSO, it was a reliable, independent organisation, until it was compromised on the water issue, now it’s a part of the government spin machine.
Was looking back over premiums I paid for past 5 years they have risen from 340 fully comprehensive to 640 – no claims no points no accidents – I know I’m crazy not to have moved but for 40 Euro less could not be bothered
@Martin Brennan: mine is similar – went from 295e to 650 e over last 5 years with axa – again no claims ,no points , no accidents — phoned around other companies and cheapest i was quoted was 810 from 123.ie . car is a 05 ,1 ltr driving approx 8000ml per year , kept inside private grounds and in a garage and i devalue by 5% each yr to cover age ,wear and tear etc . . could insure the same car in the uk for less than 300£st .
Insurance fraud is a cottage industry in certain elements of our society. And yes, the usual suspects feature prominently.
@Thomas Sheridan: Insurance fraud is not the only reason for high policy prices. The fact the a vehicle with a valid NCT can be penalized because of its age shows the lack of regulation by the powers that be on the industry.
@Thomas Sheridan: there are individuals going around looking to hit other cars and then claim. Ask any garage repairs.. They know it.. Its a scandal.. And the courts buy into the whole scam
All the scammer needs is a doctors cert..
What’s the word I looking for, oh yes lies, pure bull from the Insurance company
Public Liability insurance has gone up year after year for the last 5 years.its a cartel no ifs or buts.
I called 3 insurance companies to get a quote for a 2004 1.6 Nissan primera with a years nct and was told that they don’t cover cars over 12 years old and told them it has a valid nct, they said that the nct won’t be accepted by them because of the cars age
@Des Decourcy: How do vintage cars get insurance, then?
@Michael Lynch: ‘vintage’ cars are classed as a special case and are usually only covered by certain insurance companies.
Careful, they employ a lot of people around you and pretty much own this country. My £400 London car insurance with no health insurance (thank you NHS) seems like a distant memory. Over here we all have to pay monthly direct debits of hundreds to them. They should be run out. If you work for them you should keep your head low and stay quiet.
Insurance companies are finding it tough to earn money:
Low interest rates hurting margin on solvency capital.
Over regulation causing defensive strategic planning.
Unfair wage demands by staff pushing up the costs on all insurance consumers.
It’s a thankless but valuable role they play.
@thephantomshit: you’ve brought a tear to my eye
@Tom Ryan: His standard of trolling has that effect on a lot of people.
@thephantomshit: Jesus…the Blueshirts and insurance companies and the banks will be delighted with that comment. I can only imagine you will contribute to the costs Denis O’Brien will now have to pay.
@thephantomshit: Do you always believe your own bullshit?
@thephantomshit: “OVER REGULATION” now i know your joking !
With the same company for over 10 years. Full lience,Never any points or crashes.Got a ridiculous renewal quote again this year, rang them and they told me it was the best they could do.so I went on their website and put in all my details as per my renewal and it came up over €70 cheaper. Rang them to explain it and they gave the cheaper quote to me plus my 10% off again as I am a multi policy holder.
But govt will do nothing.
Is Leo still a GP. It appears that every issue has to be brought to and through him. I thought that the minister of transport or likewise should oversee this sector. The insurance companies, allow them add on approx.10 or 15%each year. No control by the relevant ent Gov. dept. Quotes anomalies noticed by me by different companies eg; comp €901, 3rd f&t just €20 less, or €881. The other insurance co; € 737 comp., €437 3rd f&t , € 300 less ? How do they compile their quotes to arrive with such deviant figures. Gov. Get the fingers out , you have or should have the cost of the total cost of car insurance to the citizens of this state, and this will show the annual increases, and the supposed reasons justifying them. If a motorist unfortunate to have an accident his premium goes up 300/400% so the companies are very well covered in all situations. Also, to finish, I was told the value of the car did not matter when applying for comp. cover, so it’s all an CONUNDRUM!
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