Thursday 23 November 2017

Car cover scandal: Insurance firms say bills to keep rising as blame game breaks out

A car insurance premium that cost €500 last year will now be hitting almost €700
A car insurance premium that cost €500 last year will now be hitting almost €700
Charlie Weston

Charlie Weston

spiralling motor insurance bills will continue to dramatically climb.

Cover is now rising so fast it has sent inflation to its highest level in three years.

A car insurance premium that cost €500 last year will now be hitting almost €700.

The blame game for the price hikes has broken out.

Insurance companies point to higher claims awards and drivers claiming more often.

But the insurers fail to acknowledge the role of bad management, low returns on their investments and the after-effects of a price war.

Employers blame the Government for failing to act in the three main areas affecting business costs: insurance, bank charges and legal fees.

Motor premiums were up almost 40pc in the year to July, according to 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.

Many drivers are being hit with higher increases, especially if they have a claim, an older car, are young or have penalty points.

And 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 they expected premiums to keep going up this year.

While the cost of motor insurance continues to rise, the CSO figures show falls in the prices of petrol, diesel and cars.

The CSO figures show that house insurance was also up, by 11pc in the year to July.

A spokesman for the Department of Finance insisted it was taking the issue of rising premiums seriously. An inter-departmental working group on insurance costs held its first meeting on July 20.

Irish Independent

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