The average cost of car insurance has risen by 32% to €909 in just one year-and premiums are expected to continue to soar, motorists have been warned. By Liz Farsaci
Drivers are facing further price hikes in the future as insurers absorb the cost of the Setanta Insurance collapse-which folded in 2014 and left outstanding claims of €90 million unpaid – and a European ruling on VAI, according to industry insiders.
Ian Hughes, chief executive of Consumer Intelligence, said:"Average motor insurance premiums are racing away and all the Indications are that they will continue to climb.
"The Setanta and VAT rulings are adding to the pricing pressure for insurers and additional costs they are facing could be passed on to drivers.” Simon Moynihan, of price comparison website Bonkers.ie, said a continued increase in premiums will ultimately end up harming motor insurance companies because they will lead to fewer drivers- or an increase in those who choose to drive without insurance.
Under-25s-and-Dubliners are currently the two groups hardest hit by insurance prices, the research found, although average premiums do vary.
Average premiums for under-25s are now €2,681 and have risen 37% in the year to April.
Average premiums for all drivers in Dublin, meanwhile, have increased by nearly 36% to €1,077 compared with 31% for the rest of the country to €858.
Those aged 25 to 49 have seen rises of 31.5%, while increases have been at 32.7% for the over-50s, who pay the lowest premiums on average at €695.
Mr Moynihan claimed car insurance companies are “wiping out a younger generation of drivers by increasing motor insurance premiums.
He said that, for his generation, buying a car was a rite of passage-but not so for the current generation of potential young drivers who are being priced out of car ownership.
“This generation is conditioned to the point that they're not aspirational for cars,' Mr. Moynihan told the Irish Daily Mail last night. “I think what’s happening is the sheer expense. Where possible, people seem to be workIng away from a car culture."
The consumer expert said there are currently 1.8 million active private motor insurance policies in Ireland, and further price hikes are on the cards.
Consumer Intelligence anticipates the Setanta ruling - which means the Motor Insurers Bureau of Ireland is likely to pick up the costs-will add around €50 to average premiums while insurers' costs will rise by up to 23% as they recover VAT on outsourcing.