Insurance premiums on the rise

Motor insurance premiums are expected to continue rising substantially during 2016.

Premiums rose 27% this year and the trend is due to continue next year with another 25% rise on the cards. For an average family-sized car, that equates to more than £220.

The Central Statistics Office produced the figures for this year, with insurers predicting further rises next year.

The numbers have prompted urgent calls for a taskforce to be set up to look into escalating prices, although Conor Faughnan, director of consumer affairs at AA Roadwatch, blamed the insurance industry for underpricing in recent years.

He also blamed the high premiums on needless waste, fraud and high legal fees.

Michael McGrath, Teachta Dála for Cork South Central TD, said, ‘Motorists are absolutely reeling from these increases in insurance premiums. Unless action is taken, further steep rises in motor insurance premiums are certain.

‘There are a number of very worrying trends across the industry. The Central Bank has recently reported an average increase of 8.3% in private motor-claims frequency, and an increase of eight per cent in the average cost of a claim from 2013 to 2014. The time taken to settle motor insurance claims is now rising.

‘Up to 2013, we were in a period of falling motor insurance premiums. However, the benefits that were achieved from concerted action to reduce costs are now evaporating.

‘This is resulting in a huge squeeze on family finances and putting businesses under increased cost pressure.’

Michael has called for a taskforce similar to the Motor Insurance Advisory Board to be established to combat prices.

He said, ‘The forum should bring together representatives of the industry, consumer advocates, the Garda Transport Division and the regulator, to bring forward practical proposals.’