Motorists could be in for a nasty surprise when it comes to insurance renewal time, as premiums are expected to rise by as much as 10 per cent next year. This increase comes on top of the 4.4 per cent average upshift in premium prices seen since March 2013.
The increase comes as the insurance industry tries to recoup the €192 million loss experienced in 2013 through increased claims, but also to cover the costs of damage caused by Storm Darwin earlier this year.
For one insurer, FBD, damage caused by Darwin and other storms resulted in an excess of €44 million being paid out to claimants, money that it appears will be recouped by premium increases being foisted onto motorists rather than property owners.
The number of new motor insurance claims rose by 51,083 in 2013 and much of the industry blames the rise on an increased number of cars on the road and those cars being of higher value. However, data provided to CompleteCar.ie by Cartell.ie actually shows a decrease in the number of registered cars from their 2,272,344 peak in 2009 to today's 2,142,054. Despite a slight upturn in new car sales this year, overall car ownership has been on a downward slope since October 2011, when there were 2,238,413 cars on the road.
Economist Jim Power, writing for the Society of the Irish Motor Industry (SIMI), also quashed the idea of cars being of higher value, as the average cost of buying a new car is down by 2.7 per cent compared to the same period in 2013.
Despite these contradictory findings Michael Horan, Non-Life Insurance Manager of the insurance industry representative Insurance Ireland, exclusively told CompleteCar.ie:
"The cost of claims is increasing. Premiums are dictated by the cost of claims and increased claims costs generally lead to upward pressure on premiums."
Put simply: the cost of claims are up and premiums must follow.
However, Patricia Byron, CEO of the Injuries Board (formally PIAB), lays some of the blame for rising claim costs directly at the insurance industry's door. Earlier this year Ms. Byron blasted the industry for settling up to 18,000 of the estimated 45,000 claims referred to it out of court and behind closed doors.
The Injuries Board, specifically set up to tackle the high cost of insurance in Ireland, has called for "greater transparency from insurers through their annual returns to provide greater insight and confidence in insurers' early settlement programmes" citing concerns about the impact of out of court settlements on "competitiveness, premiums and potentially, on false or exaggerated claims."
Whoever, or whatever, is to blame for the premium increases it is clear that the motorist will be the one left to foot the bill. Our best advice is to shop around. Car insurance may be a grudge purchase, in that you are legally bound to have it, but the competitive market can still be used to your advantage.