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'Thrown to the wolves': There's no justification for 300% price hike in car insurance, says committee

An Oireachtas committee said Irish drivers must get detailed breakdown of why their car insurance costs so much.

Image: Shutterstock/Robert Crum

Updated 4pm

MOTORISTS SHOULD BE given a detailed breakdown of their car insurance premium from insurance companies, an Oireachtas Committee report is to recommend today.

The report, seen by TheJournal.ie before publication today, recommends that renewal notices should be “broken down point-by-point” to clearly show the individual components that make up the total amount being charged.

This should include a breakdown of the charges associated with the quote: for example, explaining that because the driver is male, under 25, driving a car over five years old and parking it overnight in an area that is considered risky by the insurance company.

The committee believes more transparency is needed on how insurance companies are reaching decisions to increase motorists’ premiums. Reports have indicated that annual payments have jump from anything between 40% and 300% recently.

Insurance companies 

Speaking at the report’s launch today, committee chairperson Fianna Fáil’s John McGuinness took a tough line with the insurance companies.

He said car owners being hit with up to 300% insurance hikes have been “thrown to the wolves” by the insurance sector.

Despite the sector reporting that it had been losing money in recent years, he said the price hikes could not be justified and were not sustainable.

The committee accused the motor insurance industry of engaging in “cartel-like behaviour” by hiding information, which McGuinness said should be in the public domain.

‘Inexplicable increases’

The committee has said the most disturbing element to the pattern is the “lack of any rationale or explanation for the sudden and inexplicable increases”.

Over the last number of months, the Joint Committee on Finance, Public Expenditure and Reform has been listening to submissions about the rising cost of car insurance.

McGuinness called out key players in the sector and also levelled criticism at the Central Bank.

He said it was time for the Central Bank to “step up to the plate” and protect the consumer.

The Fianna Fáil TD said it was time for the Central Bank to “be fearless” with the insurance companies to ensure consumers are safeguarded, adding that it was a “lackadaisical approach that led us here”.

While he said it was difficult to point to one reason for the spiralling costs, due to the lack of data supplied by the insurance companies, he said the committee hearings showed that a lot of “different players are blaming each other”.

Sinn Féin’s Pearse Doherty said in order for companies to make up for lost profits, they turned to the motor industry, stating it was seen as a “soft touch”.

Other recommendations contained in the report include giving explicit recognition that a valid NCT certification is an affirmation that a vehicle is roadworthy, irrespective of its age.

This is to stamp out insurance companies’ blanket ban on insuring cars that are over 10 years old.

The committee called for an agency to be appointed to collate all the data from the insurance companies and put it into the public domain.

It calls for the Central Statistics Office (CSO) to immediately be assigned responsibility for collecting the information on claims data.

McGuinness also called for the Book of Quantum to be reviewed and updated on a regular basis.

Getting rid of paper insurance discs

The abolition of windscreen paper insurance discs is also being recommended. These are to be replaced by Automatic Number Plate Recognition (ANPR) technology, which should be introduced “as a matter of urgency”.

The issue of returning emigrants and immigrants accessing motor insurance is also included in the report. It’s recommended that a system be established in Ireland as soon as possible to recognise no-claims bonuses and official documentation from other jurisdictions.

So, when can customers expect to see their premiums come down? 

McGuinness said the committee could not give a timeline as there are a lot of stakeholders that need to take action.

He said he expected the government to move immediately on the measures that are within their remit – and that includes legislation, he said.

While he said he wanted full cooperation from those in the insurance sector, he expected some would have to be “pulled and dragged to do this”.

“At the end of the day, this needs to be drive by government and the minister,” he said, adding that otherwise, this will just be another report that sits on a shelf.

McGuinness said it was time government show the insurance sector “we mean business”.

Minister of State Eoghan Murphy said he welcomed the committee’s report, adding that it appeared to validate the recommendations from the government’s working group on the same issue.

“I will finalise the government’s plans shortly and today’s discussions, and the work of the committee, will greatly assist government action in providing certainty to consumers and industry alike.”

Read: ‘My concerns were entirely ignored by government’: Alan Shatter on Guerin report>

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