I usually enjoy getting my car insurance renewal letter. And no, I haven’t lost my mind altogether. It’s just that each year my driving record improves, my no claims discount gets better, and the value of my car goes down a little more… and for no discernible reason whatsoever my policy renewal goes up!
Which kicks off a springtime song and dance routine that I go through every year. My insurance company is “delighted” to try and charge me more money, and I do my darndest to make sure that they don’t.
So when my big friendly looking Chill Insurance envelope arrived a couple of weeks ago, I smiled and thought – ah yes, here we go again!
Then I pulled out the fat sheaf of insurance paper, scanned it, and saw that Chill was:
Delighted to confirm that…
Your renewal price is €917.11
And that burst my balloon altogether.
It had to be a mistake. It looked like double what I paid last year. There’s no way I’m paying that I thought, and chucked the letter into a corner. Then I dug out my insurance documents from last year and found that fully comprehensive had cost me €484 for the same cover, on the same car, through the same broker, and with the same insurance company.
Now €484 seems about right for a regular middle-aged bloke. And ok, I was expecting an increase this year because all the insurance companies had been bleating on about losing money. But how on earth could they justify increasing my insurance by €433 - which is nearly 90 per cent??
I haven’t had any accidents, I have a driveway where I keep my car, and I only drove a couple of thousand miles last year, so I really wanted to know what was going on. I was taking it personally. What did I do to deserve a price increase of this size??
I knew that Chill would call – they are good like that. Then we could have a chat about what gives.
And sure enough, a couple of days later I got a call from Layla who wanted to make sure I got the letter, and was I ready to renew now? And of course she could do it right there over the phone.
To turn the conversation to my price increase, I asked her how much I paid last year. And unsurprisingly, she didn’t seem too enthusiastic about telling me. So why has it gone up by so much I asked her?
Well, according to Layla, my car is just too old, and most insurance companies have decided not to insure older cars now.
It doesn’t matter that I have a (nearly) spotless driving record and that my car has just passed the NCT. They don’t care… it seems they just don’t want me anymore. And to encourage me to shag off and buy a new car, or shag off and find a new insurance company, they cranked up my premium.
“So do you want to renew today?”
No of course I don’t. I’ve never been more motivated to get a better insurance quote in my life! I thought.
But in fairness to Layla she did her thing and came back to me with a “requote” and offered me the same cover for €836.
Better, but still 73 per cent more than last year.
Last year, insurance companies reported losing money all over the place. In fact, it was a loss of €96 million by FBD in the first six months of 2015 that drove their former CEO Andrew Langford to say that they had experienced the worst events in the history of the company. Mr Langford then fell on his sword.
Normally you don’t hear much from insurance companies, but last year we heard again and again that we should expect car insurance increases of at least 30 per cent due to all manner of mishaps that had befallen the insurers. Insurance Ireland even put a number on it - around €300 extra on comprehensive car insurance premiums.
Well, according to Insurance Ireland, awards are at an all-time high, there’s too much fraud, competition amongst insurers had driven premiums below a sustainable level, and then there’s the lawyers inflating the cost of claims.
It also seems that Ireland is the whiplash capital of the universe and people with wobbly necks are getting whop-loads of cash for their pain and suffering. And these whiplash awards, which average around €15,000 a piece and make up 80 per cent of car insurance claims, have to be paid for through higher premiums.
(It does seem to me though that highlighting the amount you can make from a whiplash claim might actually encourage more people to pursue whiplash claims… but that’s a subject for another day.)
Then there’s High Court and now Court of Appeal decisions that say the Motor Insurers' Bureau has to cover the €90m cost for the collapse of Setanta Insurance. It is reckoned that this will add around €50 to each and every motor insurance policy.
So there you have it. Massive increases for everyone in the audience. In fact, the Consumer Price Index shows that the cost of car insurance went up by over 30 per cent in 2015. And that’s on top of a 12 per cent increase in 2014. And because of the Setanta rulings, we’ll definitely see further increases in 2016. Ouch.
But getting back to my own car insurance problem. My increase is three times what the CSO says it should be. So it’s time to shop around.
The first place I decided to go was 123.ie. There was a bit of fuss a few weeks back when their online service was quoting some young drivers in excess of €20,000 for car insurance, so I was eager to see what kind of quote I’d get - what with my old car and all.
I spent nearly 30 minutes filling out the forms on the 123.ie website and provided them with an extraordinary level of detail only to be told that:
“123.ie is unable to offer you a Quote on this occasion.
However, we are delighted to introduce KennCo Insurance.”
Delighted… Again. What is it with that word and insurance companies?
So a big “no thanks” from 123.ie and a referral to KennCo – which is actually where my €917.11 renewal quote from Chill really came from. But what they heck I thought. I’ll give them a call anyway and see what gives.
I got through to a perfectly nice chap called Stephen who told me that if I was a new customer, I wouldn’t get a quote from KennCo at all. Only I’m an existing customer so they have to offer me a renewal quote.
Stephen proceeded to explain how insurance works along the lines of “when we lose money we charge everyone more to make up for it.” And then of course, it’s the car. It’s more than 15 years old and KennCo are not quoting for old cars anymore. It also seems pretty clear that they are trying to get rid of me with the massive renewal increase too.
But where would I go? Nobody seems to want me, my old car, or my sensible middle-aged driving. And then I saw an online ad from Allianz inviting me to get a car insurance quote with them.
So, after imparting a frightening level of personal information to Allianz, I got neither a quote nor a refusal. Instead I was asked to:
“Please review your details to see if they have been input correctly. If they have please call us…”
Needless to say, I didn’t bother calling them. An invitation from an insurance company to call them after not providing an online quote is basically a refusal.
I tried FBD next. Their quick quote gave me an online price of €612.50 which was promising, but after entering an extraordinary amount of personal information FDB came back with:
“We’re sorry, we are unable to provide you with a quote at this time.”
What was interesting though is that they offered to send me a letter with the reason why I had been turned down. I wasn’t going to miss this, so I requested the letter. When it arrived, it said:
“Unfortunately at this time we are unable to quote you for the following reason(s):
You do not meet our New Business Underwriting criteria for this channel.”
So the reason does not provide me with any insight whatsoever, but at this stage I can read between the lines.
Interestingly enough, FBD’s new CEO Fiona Muldoon said that the company increased rates on average by 9 per cent in 2015 while at the same time the company lost 9 per cent of its customers, and they brought in more or less the same amount of money as the previous year.
So does that mean that price increases worked for FBD? I’m not sure. But there was one thing the CEO was clear on – rates would continue to “harden” in 2016. Which sounds like it could be rather painful for FBD customers.
An insurance guru who occasionally works with bonkers.ie was in the office recently and I presented her with my conundrum. I didn’t want to accept the shocking renewal but none of the big companies would even give me a quote!
She thought this was hilarious, told me that car insurers had been losing money for years, and said it was only recently that they felt confident enough to really crank up car insurance premiums. Oh, and cut loose undesirable customers like me... so she suggested a broker. Someone with the experience to navigate the treacherous world of motor insurance.
Now I’d always thought of brokers as being great in situations like – say a 21-year-old getting quoted €21,000 for car insurance. But I’d never had any trouble getting decent quotes by myself in the past, so I hadn’t felt the need to use them.
Anyway, she gave me the names of a few of brokers including its4women.ie – and then it was my turn to laugh. But they’ll quote a bloke no problem now due to Gender Equalisation so I gave the brokers a go, and after some valiant effort, I was quoted €850 by David Pike. Which, in the current environment, seems to be pretty good for a new customer policy. And it verified that I simply wasn't going to do any better than that.
But no matter which way I go for my car insurance, I’m facing a price increase of at least 73 per cent. More than most people sure, but the game has truly changed for everyone. A 30 per cent price increase this year on top of a 12 per cent increase last year is a massive burden for people to bear.
It’ll mean that a policy costing €500 a couple of years ago will cost €730 now. An extraordinary increase for a product that must be bought by more than 2 million people every year.
And by their own admission, insurance companies are losing customers as a result. And the more they lose, the more they’ll “harden” rates which will lead to even more lost customers and ultimately, it'll lead to more uninsured drivers.
And sadly, it seems to me that the car insurance companies are actually doing more now to get people on their bikes than the Green Party were ever able to do.
If your insurance renewal has increased, you should be able to bring it down with a little bit of time and effort. You can see our advice here:
How to make sure you are not paying too much for car insurance
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