The latest stats from the Consumer Price Index (CPI), reported through the Central Statistics Office (CSO), reveal that over the past year motor insurance premiums have fallen significantly.
If you’re a motorist in Ireland then chances are you’ll be all too familiar with having to deal with the rising cost of car insurance premiums, not to mention coping with the confusion as to why they’re so high.
And with the last census revealing a close to 5% increase in the number of adults now living in towns and cities across Ireland, there is sure to be an increase in the amount of people driving on our roads.
The good news, however, is that the latest statistics released in the Consumer Price Index (CPI) for January have signalled a big decrease in the price of premiums over the past 12 months.
But what does this mean for the average consumer? Read on to find out the full details.
What is the CPI?
The Consumer Price Index (CPI) is a metric to determine the average change in prices experienced by consumers when purchasing goods and services.
The Index is complied by the Central Statistics Office (CSO) in Ireland and figures are released on a monthly basis. The index is the official measure of consumer goods and services inflation in the country.
What we know
The latest data released from the CSO has revealed that the price of car insurance has dropped by a massive 6.9% over the last 12 months, while the cost of insurance for motorcycles has remained unchanged.
The statistics also reveal that travel insurance increased by 1.4% in the period, roughly in-line with overall inflation at 1.3%.
The 6.9% decrease in the cost of car insurance from this report is, however, somewhat at odds with this story we reported on in December which revealed that the cost of motor insurance premiums actually rose by 42% from 2009 to 2018, despite the cost of claims for insurance companies decreasing.
So what’s the reason behind this, aren’t prices going up?
Why the increase?
While the decrease in the cost of car insurance is a welcome change, if you’re reading this and are wondering why your premium actually went up there may be a number of reasons for this.
For example, if you bought a car with a bigger engine recently then this might have affected the price of your premium, as cars with bigger engines are seen as a greater risk by insurance companies, and for obvious reasons.
As well as things such as engine or car size, other factors that may influence the cost of your premium include over-valuing your car, moving to an area that's considered less safe, or having penalty points on your licence.
But what if your circumstances haven’t changed?
What action to take
If your premium was driven up and your personal circumstances did not change, then the most important thing to remember is to be vigilant and shop around - we can’t stress that enough.
As we’ve seen time and time again, loyalty doesn’t pay, so consumers shouldn’t rely on getting a reduction in their premium based on how long they’ve been with a particular insurer.
The only way to see a visible reduction in your premium from year to year is by consulting the latest deals on the market.
To help with this, back in November the Central Bank introduced a number of rules to combat the growing cost of car insurance in Ireland. For example, renewal notices must now be issued 20 days before a policy is due to expire and they must now include a quote for all cover options. Take a look at the full article here.
Jonathan Hehir, Managing Director of Insuremycars.ie said of the results:
“The CPI should serve as a good reminder to people that if they are not seeing savings in areas where prices are reducing, then perhaps they need to consider switching the provider from whom they get certain goods and services.
"Motor insurance is one of the most fragmented products out there when it comes to pricing – quotes can vary wildly from person to person and insurer to insurer. That’s why it’s absolutely imperative that people don’t simply accept the renewal price given by their current insurer and instead shop the market and speak to the experts.”
The data also revealed a 10.6% reduction in prices across Communications; so with prices decreasing, now is as good a time as any to switch suppliers and save money. There are a number of great broadband-only deals available on the market right now, which you can check out right here.
Conversely, prices across Housing, Water, Electricity, Gas & Other Fuels are on the rise, up 3.5% over the past 12 months. Shopping around for the best deals is, again, the only remedy.
Tell us what you think
What do you make of the latest stats from the CSO? Are you experiencing rising car insurance premiums? Let us know in the comments below and maybe we could help.