'Excess' on motor policies shoots up
Published 14/12/2011 | 05:00
INSURERS have increased the amount of money that drivers have to pay before they can get a payout on a claim by up to €300.
The so-called excess on motor insurance policies has shot up by between 50pc and 100pc in the last year, official research has found.
Aviva now requires a motorist making a claim to meet the first €600 of any payout on a comprehensive policy, up from €300 last year.
This is a 100pc increase in the excess on its comprehensive policies, according to the National Consumer Agency (NCA).
Royal and Sun Alliance (RSA) is demanding that a motorist making a claim meets the first €450, a 50pc rise on the excess it imposed on comprehensive policies in May 2010.
Consumer experts said the move to hike the excess element on motor policies was a way to avoid premium hikes and push up profits for insurers.
The cost of motor insurance has risen by 4.2pc in the last year, according to the Central Statistics Office.
Chief executive of the Consumers' Association Dermott Jewell said the sharp rise in the excesses would not be noticed by consumers but would discourage consumers from making claims.
Smaller value claims tend to go up during a recession as cash-strapped consumers attempt to get money together.
"This means that insurance companies are recouping your premium payments if you make any type of claim. Consumers are not getting good value for money if their insurer is demanding a large excess."
The latest survey from the NCA also shows that younger drivers can save up to €1,174 by making sure they only sign up for the best value policy. The state consumer body said it found differences of up to €792 on policies between a 20-year-old man and a 20-year-old woman.
NCA chief executive Ann Fitzgerald said this situation was due to change over the next year as the European Union applies rules banning giving different insurance quotes based on someone's gender.
"It will be interesting to monitor developments in this regard over the next 12 months, as a recent European Court of Justice ruling which prohibits gender-based discrimination in insurance and pension premiums comes into effect on December 21."
The survey also revealed that insurers are charging interest rates of between 17pc and 23pc for those who choose to pay their premiums monthly.
The NCA survey collected information relating to seven driver profiles across eight insurance firms.
It found that drivers in all categories can achieve significant savings by shopping around.
Ms Fitzgerald added: "Yet again, our insurance survey has identified evidence of substantial savings to be made by shopping around for motor insurance quotes. This is even more so for younger drivers."