Motor insurance soars by 70pc in just three years
Published 12/08/2016 | 02:30
Surging motor insurance premiums have seen inflation hit its highest level in three years.
Motor premiums were up 38.3pc in the year to July, according to inflation figures from the Central Statistics Office.
Over the last three years, the average premium is up 70pc, according to a deeper analysis provided by the CSO.
The ongoing rise in insurance costs was one of the main reasons that annual inflation hit 0.5pc, its highest level in three years.
The rise in motor insurance costs means a premium that was €500 last year will now be around €190 dearer.
Many drivers are being hit with even higher increases, especially if they have a claim, an older car, are young or have penalty points.
Premiums look set to keep rising, despite some in the insurance industry arguing that rates are close to peaking.
Two of the largest insurers in the market, RSA and Aviva, warned last week that they expected premiums to keep going up this year.
RSA said injury claims continued to rise and Aviva said it could not rule out more premiums increases as claims costs continued to be a serious challenge to it.
While the cost of motor insurance continues to rise, the CSO figures show falls in the prices of petrol, diesel and cars.
Employers' body ISME said: "Government has failed to act in the three main areas affecting business costs: insurance, bank interest and charges and legal fees."
Michael Horan of Insurance Ireland, which represents insurers, said that premiums were being pushed up by higher claims awards and drivers claiming more frequently.
He called for greater powers to be given to the Injuries Board to ensure that fewer personal injuries cases end up in the courts, where legal fees add hugely to the cost of settling claims.
He said awards here, which are higher than other countries, needed to be benchmarked against those in other EU states.
A spokesman for the Department of Finance insisted that it was taking the issue of rising premiums seriously.
An inter-departmental working group on insurance costs, headed up by Minister of State Eoghan Murphy, held its first meeting on July 20.
However, it is not due to meet again until September 2.
The spokesman said pricing was a matter for insurers but that the working group may identify measures to reduce the cost of claims, a move that would reduce premiums.
The CSO figures show that house insurance was also up, by 11pc in the year to July.