More car insurance prices hikes for 2016

Drivers face 15% jump on average... after 30% in 2015

DRIVERS are facing further motor insurance hikes in 2016 having already been hit with a surge in premiums over the past year.

Following the Irish Daily Mail’s report on young drivers being offered cover for over €20,000, it has been revealed that premiums rose by 2.4% in January alone and by 30% over the past year.

The head of the Irish Brokers’ Association, Brian McNelis, said the hikes did not come as a surprise and said we could expect rises of 15% this year. One consumer advocate described insurance companies as ‘reckless’.

Car insurance was up by 30.5% over the past 12 months, but motorcycle insurance was up by just 5.8%, according to new figures from the Central Statistics Office.

In contrast, travel insurance was down by 5.8%, health insurance was up by just 2.3% and home insurance was up by 7.2%.

The change compares to the consumer price index overall of a rise in prices of just 0.1% over the past year.

Mr McNelis said: ‘Motor insurers have been steadily increasing premiums for a while now and indicators suggest that there will be further increases into 2016 – on average we would expect these to be up to 15%.

‘Some policyholders are only experiencing increases of 5% to 7% – which, while bad news for t hose dri vers, are nothing compared to some of the staggering increases being experienced others such as young drivers, penalty-points holders and those with previous claims.

‘In all cases, brokers are really consumers’ only source of choice to determine where the best-value product will be.

‘Further into 2016, we expect and hope to see insurers concentrate on getting their books of motor business corrected, with a major focus put on anti-fraud initiatives.

‘This should at least curb the increases on premiums.’

Consumers’ Association chief Dermott Jewell said: ‘They could be termed reckless because they cut prices so much to win business but now, with extra cars on the roads as the economy picks up, they are now having to increase them and it’s causing a huge difficulty.

‘It has the potential bring about a serious lack of trust from consumers in any hope of getting out of the debt that they’re in.

‘It could put people off the road because they can’t afford insurance.

‘It’s the only insurance we must have by law and yet it’s at an outrageously high price.’

On top of the current jump in prices, car insurance was up 30% in 2014 and up by 12% in 2013.

Motor insurance experts say 2015 saw premiums ‘sky-rocket’ across the board – mostly to allow insurers to recoup losses from claims in 2014, sparked by a surge in traffic on the roads.

The industry also suffered sharp losses from home insurance claims connected to Storm Darwin two years ago.

Sinn Féin enterprise spokesman Peadar Tóibín said: ‘ The insurance companies are attempting to stack the deck in their favour.

‘By increasing premiums across the board and refusing to insure older cars, these companies are causing the cost of owning and driving a car to sky-rocket and it simply is not good enough.

‘Many drivers are not in a position to take their business elsewhere or will look, quite understandably, with scepticism that any other company will simply engage in the same practices.

‘It is unacceptable for companies to boost the cost of car insurance to such a degree.

‘It is only bad for drivers and particularly young drivers, who face being priced off the road as a result of such profiteering.

‘Motor insurance is mandatory and as such, the Government must conduct a review of premium prices as a responsibility as legislators.

‘The Government did precious little to help families who were left without flood insurance, but perhaps they will be less apathetic in the light of the fact that there are almost two million cars on Irish roads.’

A surge in traffic on the roads