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With the recovery of the Irish economy (your mileage may vary, etc.), there is an increasing trend for those who left during the dark days of the recent recession to come home again. Following in the returning footsteps of thousands of their forebears, these new returnees are finding one major obstacle in their way - the cost of car insurance.
This week, David Shaw, director of XS Direct - a specialist insurance company which is looking to offer better deals to returnees by selling them policies with a higher built-in excess - has called on both the insurance industry and the Government to do more to help those coming back to these shores. "This issue is affecting a growing cohort of people" Shaw told CompleteCar.ie. "Of the 84,600 people who immigrated or returned to Ireland in the year to April 2017, some 27,400 were Irish nationals returning home. However, there's a good chance that greater numbers of our skilled workforce will stay away because they believe that accessing such financial protections will be too difficult and expensive.
"We were aware of the difficulties faced by Ireland's returning workforce, of which there are many. When we looked at our own customer database, we saw that more and more of these people are coming to us for policies. And it's not just Irish people returning, but immigrants from other countries too. In this country, driving is necessary for a large percentage of the population if they want to be able to function efficiently on a day-to-day basis, whether it be getting to work, dropping the children to school, getting dependant relatives to and from hospital appointments etc."
XS Direct quoted an example of a fictional 41-year old person, returning to Ireland with no no-claims bonus, and looking to insure a 1.9-litre 2014 car. Out of eight of the major Irish insurers, six did not return with a quote at all, while the two that did both quoted premiums of more than €4,000.
The market for motor insurance has, for the past five years, been exceptionally febrile, with average premiums soaring by more than 70 per cent since 2013. According to official figures from the Central Statistics Office, those increases have begun to roll back a little, but most drivers are still paying far more than they did, in spite of improvements in road safety statistics.
Kian Griffin, one of the driving forces behind the Ireland Underground movement which lobbies both Government and industry for lower premiums says that there is a simple explanation as to why returning emigrants are paying more. "There's a very simple solution to covering those coming back from abroad, accept their no claims history from their previous insurer" Griffin told CompleteCar. "I don't know why companies aren't doing this already. Profiteering is the only reason I can see."
A spokesperson for Insurance Ireland, the group that represents Irish insurers, told CompleteCar that the industry is doing its bit. "Insurance Ireland undertook a series of actions in 2017 to address the issues experienced by returning emigrants and the actions taken are having a positive effect" said the spokesperson. "This includes the implementation of a protocol agreed between Insurance Ireland and the Department of Finance to ensure a greater consistency of treatment for returning emigrants. The protocol covers how insurers consider driver experience from abroad when a person has previous driving experience in Ireland, and is coming from a country that drives on the other side of road. The protocol was introduced in the second half of 2017 and since then the number of cases referred under the Declined Cases Agreement for drivers from overseas has almost halved."
Insurance Ireland went on to claim that the higher premiums paid for car insurance in Ireland are still down to the higher awards for damages and injuries made by the courts. "Our personal injury awards are dramatically out of kilter internationally such as an average whiplash award here being €15,000 versus €5,000 in the UK, and the UK Government has committed to passing legislation to cap whiplash awards there. There is a real opportunity to bring about sustainable reform of claims costs in 2018, which would benefit all policyholders, and it should not be missed" said the spokesperson.
Kian Griffin, though, thinks that the insurance industry in Ireland requires radical restructuring, something that he feels the Government will not tackle. "Despite CSO statistics showing the average cost of motor insurance declining in the last 12-18 months, many individuals, particularly younger drivers are still paying sky-high premiums and struggling to get on the road. It is particularly difficult for those in rural areas where public transport is not an option" Griffin told CompleteCar. "The Department of Finance has been dragging its feet on this matter for far too long, it has had numerous submissions over the last two years with various options for tackling the extortionate cost of insurance. It has long since past crisis point. The private insurance sector itself has had many opportunities to correct itself and still refuses to do so. Perhaps it is time for Ireland to look at an altogether different system of insurance. A no-fault system, much like New Zealand, has often been mentioned but not fully analysed by the Department. It may be that such a radical change is beyond this current government, it would almost certainly upset the interest of the companies involved in the sector. It would likely, however, be of benefit to the people."