This coming Thursday, I will appear in front of an Oireachteas committee to discuss possible solutions to the current motor insurance crisis. I will be putting forward some ideas which may help alleviate the situation as well as trying to highlight the plight of motorists in Ireland. Below is an advance draft of my speaking notes for the day. The session will be broadcast live on Oireachteas TV from 11.00.
For the last number of weeks, I’ve been receiving emails, calls and social media messages from members of the public in despair at the cost of their motor insurance. Many are considering, or have already, refusing to pay their motor insurance due to the cost. As you will no doubt be aware, figures recently released show a 17% increase in claims involving uninsured drivers. This is a very worrying figure as these claims contribute to the overall cost of premiums and, judging by the messages I’m receiving, this figure could be set to rise significantly in the next 12 months.
One of the key problems that people have is that their premiums are increasing despite them having no claims or accidents. They see this as pure profiteering by the insurance companies. Obviously, I know that these companies have to turn a profit in order to stay viable and they will increase their income to outweigh their outgoings in whatever way is most convenient and offers them the best results. I personally have no problem with private companies providing the insurance, but this is not a view shared by quite a number of motorists in the Republic of Ireland. What needs to be done, in my view, is to aid all insurance companies in bringing down their expenses, so they can remain profitable while offering lower premiums.
There are a number of ways this I imagine this could be done at an official level;
Bring compensation payouts in line with EU averages.Tackle fraudulent and exaggerated claims more aggressivelyGrant greater powers to the injuries board
Another issue that has been brought to my attention is lack of clarity. When we take out motor insurance, it is to cover the risk of an accident or theft etc. It would seem logical, therefore, that as you gain experience your premium should come down. Such has been the increase in premiums, those who have been driving for years, even decades, without a claim are seeing enormous increases. There seems to be no consistency in the pricing. People want clarity, they want to see exactly what they are paying for. I believe it is only fair that when someone is offered a premium, that premium should be broken down and shown clearly to the customer. In the same line of reasoning, insurance companies are claiming that much of the increase is down to the cost of claims. Yet 70% of claims are settled out of court. I would support the motion put forward by Deputy McGrath a number of weeks ago, for the implementation of a claims database. The companies may claim it is anti-competitive, but i would argue that if everyone must disclose their out of court settlements then it is an even playing field for all companies. I fully believe that this would help reduce the cost of claims as we could monitor if suspected fraudulent claims are not being fully investigated.
Lastly, and I think this is a major issue particularly for young drivers. There is a refusal by many insurance companies to take on cars older even than 10 years. I don’t know if they are expecting a 17 or 18 year old to be earning €50,000 per year but I know very few young drivers who can afford a car less than 10 years old. If a car has a valid NCT, then I believe it should be required by law to be judged the same as a new car in terms of risk. In most countries, the insurance companies will assess the risk based on the car, or the driver. Here, they do both. I don’t see why, if I’m considered a low-risk, insurable driver in a 2010 BMW, why am I suddenly uninsurable in a 1995 Ford Escort? I am just as good a driver in either, and as such should be considered in the same risk category regardless of what car I’m driving.
The motorists of Ireland are besieged on all fronts. We are drowning under a tsunami of expense. We have to contend with an unfair two-tier tax system, high fuel costs, poor road conditions leading to unusually high maintenance fees and now rapidly soaring insurance premiums. This government consistently mentioned they would “keep the recovery going”. There may be a recovery here in Dublin, or for the upper class. But I cannot say I have felt any recovery. I speak for the everyman here in Ireland when I say we want a share of the recovery. I am here to beg you to help us. We’ve done our part slogging through the mire of the recession, all we ask is a small return to help us breathe a little easier.