Motorists Scramble To Save As Insurance Jump By Up To 50%
More than one third of Irish motorists have seen the cost of their insurance rise by up to 50% this year, leading many to drive with reduced levels of insurance cover in an attempt to manage costs, says The AA.
An AA Motor Insurance survey of over 5,000 motorists reveals that 34 percent have seen their insurance premiums rise by 20%-50% when compared to 2014. A further 30 percent are forking out up to an extra 20 percent this year, while around one in four policyholders saw no change in the cost of their premiums. Just 5 percent witnessed a cost reduction.
“After a long period of cost stability, average prices have risen by almost 40% since January 2014,” says AA Chief Executive Officer Brendan Nevin. “The AA regards this as an unacceptable burden on ordinary motorists. If the root causes we’ve identified are tackled head on, we can quickly create a stable and sustainable market for motor insurance. If they are not, then we will continue to suffer uncertainty, market failures and unacceptably high prices.”
Fraudulent activity, high legal and claims costs, poorly resourced regulation, low levels of enforcement as well as a lack of industry transparency have cost motorists dearly, according to the AA. Irish drivers will collectively pay €300 million in extra premium costs this year.
The AA Motor Insurance survey indicates that the premium hike has motorists scrambling for ways to help drive down the cost of their policies. Over one in four motorists say they were forced to purchase lesser cover and risk facing heavier financial consequences from a potential accident. Almost 40 percent are adding a “responsible partner” to their policy in the hope of minimizing costs.
Other attempts at cost-saving measures include increasing the insurance excess fee (31%), improving vehicle security (25%), driving less to reduce mileage (16%), and using a garage to park a car (18%). Ninety-three percent of motorists, however, are having to spend time shopping around in an attempt to get the best price.
“The problem is that motor insurance is a legal obligation, which essentially leaves motorists with no choice but to stump up the costs,” adds Mr Nevin. “This has not stopped a growing band of motorists from attempting to drive down these costs, though. And while cost-saving measures such as improving vehicle security and a reduction in mileage do normally make a difference to your premium, the recent increases have offset these efforts and rendered them undetectable in the total premium price. Until there are serious reforms made by the required bodies, motor insurance prices will continue to rise.”
The AA is engaged in a campaign to address the required reforms. They want to see an independently chaired task force including representatives from the Insurance industry, the Departments of Justice, Transport, and Finance, An Garda Síochána, and legal industry. The task force, according to The AA, should be chaired by someone who is independent of these groups, with the motoring organisation willing to engage with the government to discuss how this might be achieved.
