Customers 'won't save a cent' from the tweaks to motor policy quotes
New rules on motor insurance renewals won't save overcharged customers a single cent, consumer advocates say.
Critics of dual pricing in the industry - where loyal customers are quoted worse rates than potential new customers - say the Central Bank has moved far too slowly and minimally to protect consumer rights.
A Central Bank order yesterday compels insurers for the first time to mention, on any renewal quote, what premium the customer paid previously - to highlight by how much the cost is changing. Customers will be given 20 working days to consider the renewal offer, up from the current 15 days.
The Government welcomed the moves. Junior Finance Minister Michael D'Arcy said they would give drivers "the opportunity to shop around for their motor insurance".
Alliance for Insurance Reform director Peter Boland said the moves wouldn't weaken the power of insurers to overcharge customers.
"It won't make one cent of a difference," said Mr Boland, who added insurance provision in Ireland would remain "a transparency-free industry".
Others noted they had been waiting for nearly three years for the Central Bank to take any action on the Cost of Insurance Working Group's recommendations. Its 'Cost of Motor Insurance Report' was published on January 10, 2017.
Sinn Féin finance spokesman Pearse Doherty called it "a long wait for very little".
"The insurance industry has fought even this modest reform. No time should be wasted indulging it any further," said Mr Doherty, who is sponsoring a Consumer Insurance Contracts Bill that he said would "ban price discrimination by the industry".
In recent appearances before the Oireachtas Finance Committee, insurance chiefs have insisted that only around a third of renewal quotes are higher than the expiring premium. They have defended dual pricing on the grounds that offering discounts to potential new customers stimulates competition among firms.
But Mr Boland said customers "have no way of analysing what's going on. There's a rank imbalance of power between insurers and their customers".
Cathie Shannon, director of general insurance at Brokers Ireland, cautioned that the Central Bank's other new requirement - renewal notices should quote prices for all possible coverage options including third-party-only policies - might spur consumers to choose the cheapest choice without regard to the weak coverage on offer.
"These changes will ensure that even more paperwork will be provided to consumers in connection with the insurance they are purchasing," she said, "with no indication that any of it will be read."