Drivers get a break as the cost of insurance falls for first time in years
Published 11/11/2016 | 02:30
Motor insurance premiums fell last month, in what was the first significant fall in years.
New inflation figures from the Central Statistics Office showed that motor insurance costs dropped by 8.2pc in October compared to the previous month.
The cost of insuring a car and van has been rising consistently since January 2014. The last time there was a decrease in the monthly cost of cover was three years ago.
But despite the fall in premium rates in the month of October, the cost of cover was up 8.5pc when compared with October last year.
This is in contrast to annualised rises of close to 40pc in the summer.
Economist with Davy Stockbrokers Conall Mac Coille said the fall in the monthly cost of insurance may not point to a trend yet, but it was still significant.
"The cost of motor insurance has been sky-rocketing since the beginning of 2014. The sudden fall last month is the first significant decline we have seen since January 2013," he said.
Insurance experts said that companies have now hiked premiums to such an extent that they may finally be able to break even.
However, drivers are still paying hugely inflated premiums.
Cumulative rises amount to 66pc since January 2011.
The easing off in premium rises comes two months after the Competition and Consumer Protection Commission summoned insurers to give evidence to it over suspected breaches of competition law.
The competition watchdog said it was concerned that motor insurers were signalling price increases to each other before raising prices. This is seen as cartel-like activity.
Overall consumer prices fell by 0.3pc in October on a yearly basis on the back of cheaper petrol and diesel, cars, air fares and some food prices.
Sterling's fall is keeping the price of grocery and other goods that are imported down.