Young drivers face €300 hike in motor cover
Published 02/06/2015 | 02:30
Young drivers are being hit with increases of up to €300 in premiums as insurers come down harder on those with higher claims and lower levels of driving experience.
Insurance costs have been shooting up for months, but younger drivers are the biggest losers, the Irish Brokers Association said. Most insurers have stopped even quoting for drivers in their 20s.
Brian McNelis of the Irish Brokers Association said youngsters were being asked to pay premium rises of up to 30pc.
He said some younger drivers were paying €1,500 or more to get cover. The latest official figures show that there have been double-digit rises in premiums for all drivers.
But younger motorists are the ones being hit with huge increases in price.
Mr McNelis said: "The recent poorer claims experience on younger drivers will result in higher than average increases, of between 20pc and 30pc during 2015.
"That could amount to between €200 and €300 or more on a typical premium, possibly higher for those with low levels of experience."
The Irish Brokers Association said premiums were shooting up because the Irish motor market in general has not been profitable.
Some insurers have been breaking even, but others are making large losses, Mr McNelis said.
"A race to grab market share drove prices to the bottom, particularly among the main insurance players," he said.
Fraud is also estimated to cost all insured motorists roughly €50 or more on every policy.
The latest figures from the Central Statistics Office show that motor premiums for all drivers rose by 2pc in the month of April. However, rates are now up 16pc for drivers compared with a year ago.
This means that a premium that cost €500 a year ago will have gone up by €80.
Michael Kilcoyne of the Consumers' Association said drivers in their 20s and 30s were being singled out for harsh treatment.
"You have to have motor insurance if you want to drive a car. So the insurance companies have a captive market. But they are fleecing younger drivers."
He questioned claims that younger drivers were having so many more accidents than older drivers to justify such high premiums imposed on them.
Conor Faughnan of AA Ireland also warned drivers to expect steep premiums increases.
"Part of the reason premiums will keep rising this year is because in the past they were too low and there is also concern about low levels of reserves," Mr Faughnan said.
AA Ireland acts as an insurance broker and has around 170,000 drivers on its books.