Car Insurance Up By 32% In A Year
Young drivers and those living in Dublin are being hit hardest, with experts warning that more price hikes are on the way. Irish car insurance bills have soared 32% in the last year with the average price now a whopping €909.
Young drivers and those living in Dublin are being hit hardest, with experts warning that more price hikes are on the way. Insurance experts Consumer Intelligence say rising costs are down to the collapse of Setanta Insurance and new VAT directives from the European Court of Justice.
Chief Executive Ian Hughes 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”.
“It makes sense to shop around and check whether your insurance is competitive as market analysis shows prices do vary from month to month and between companies”. The data taken from 2,000 insurance quotes show that motorists under the age of 25 are likely to shell out more than the value of their cars.
They’re now forced to fork over up to €2,681 a year, an increase of 37% in the year to April. Meanwhile, road users living in the capital pay an average of €219 more than the rest of Ireland, taking an average annual hit of €1,077.
That’s a hike of 36%, compared to 31% in the rest of the country. And increases are likely to accelerate as insurers absorb the cost of the Setanta Insurance collapse and European Court of Justice VAT ruling.
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. But the data also showed that some insurers actually reduce premiums on a month to month basis – underlining the importance of shopping around.
Older drivers have not suffered as much but have still seen rises of 31.6% for those aged 25- 49 and 32.7% for the over-50s who pay the lowest premiums on average at €695. Consumer Intelligence’s data shows the average increase in premiums from March to April was 2.1% but for one provider the average price rise was 6.9% and for others it fell by 0.8%.
The European Court of Justice ruled at the end of March this year that insurers have to pay VAT on the value of work that is outsourced such as claims handling which could increase costs for firms by up to 23%. Setanta Insurance’s collapse in 2014 has left outstanding claims of €90 million from 1,750 with the costs likely to be picked up by the Motor Insurers Bureau of Ireland although it is appealing against the ruling.
Article originally posted on the Irish Mirror https://www.irishmirror.ie/news/irish-news/irish-car-insurance-bills-soars-8014758.