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Soaring costs eee 'dangerous rise' in drivers with no cover

By Darren Hassett

Many motorists are now ‘taking a chance' and driving without insurance because they can't afford to pay for it.

The number of claims linked to uninsured or unidentified drivers has shot up by 17% this year.

The latest revelations come just weeks after the Irish Daily Mail reported that drivers could face another €145 hike in their car insurance premiums even though bills have already soared to an average of €970. There were 235 more claims by uninsured or unidentified motorists between January and the end of July this year compared to the same period last year; going from 1409 to 1,644, according to figures released by the Motor Insurers' Bureau of Ireland.

Brian McNelis, of the Irish Brokers Association, said that soaring premiums are leading to motorists refusing to take out cover and driving illegally. He warned that the numbers are on the rise and added: "I'd say one of the bigger reasons is the increased cost of insurance.

"People are not renewing or insuring their cars at all. Our feedback from the ground is that people are starting not to renew or actually insure their cars, they're taking the chance because of the 40% increase on premiums from last year."

The hikes are down to steep compensation pay-outs, fraud, uninsured drivers and insurers collapsing with large debts.

Central Statistics Office figures earlier this month revealed the cost of insuring a car has risen 38.6% since July last year. Mark Whelan of consumer website, bonkers.ie, warned the insurance industry is in a dangerous cycle".

He said: "Over the past three years, premiums have increased average of nearly 70%, which has left many people with the choice of paying the increased price, looking for alternative to driving or as the statistics suggest, taking the risk of driving without cover.

"Individuals who rely on their vehicle for work or for essential activities, such as driving to the shops or collecting children from school, are the most exposed to the increase.

"For individuals such as these who simply cannot afford insurance at the recent inflated prices, the only option may be to drive uninsured."

Mr. Whelan said this will only exacerbate the problem and cause premiums to rise even further. He added: “The crisis appears to have developed into a dangerous cycle."

The MIBI is a not-for-profit organisation that manages thousands of claims against uninsured or untraced drivers every year. The organisation was set up by the Government and the insurance industry in the 1950s and it is funded by the insurers, which means the motorists ultimately pick up the tab.

The largest number of uninsured or unidentified drivers were in Dublin, which accounted for 42%. The capital also saw the largest increase in the number of claims with 78 more than the 610 made in the corresponding months last year. The next highest was Cork which saw the number of claims rise by 18. Counties with large swathes of rural areas saw some of the biggest increases.

Claims rose in 20 counties, with Roscommon recording an increase of 500% as the number rose from two to 12. Longford and Leitrim saw claims jump by 167% and Mayo saw a rise of 113%. But four Counties saw a decline, the largest drop being in Limerick which had 80 claims, down from 95 last year.

MIBI chief David Fitzgerald said the rise was ‘significant' and would impact on motor insurance premiums.

He said: "On average, the MIBI pays out approximately €60 million a year for claims of this nature. We estimate that accounts for €35 within the cost of the average annual motor insurance premium.

An increase of 17% represents a significant jump in the number of claims being lodged. It showcases the increased pipeline of payments facing the MIBI.

"While no sums are yet attached to these claims, unfortunately more claims generally means higher levels of payments coming from the MIBI and ultimately, that will impact on motor insurance premiums."

He added: "We are working together with the Government, An Garda Siochána and Other relevant agencies to help tackle this issue."

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