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Dublin: 10 °C Thursday 17 October, 2019
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"My generation are shackled by the mistakes of institutions which should have known better"

Kian Griffin argues that young motorists are being left to foot the bill for a broken system.

Kian Griffin

WE HAVE A strange habit in this country of ignoring warning signs before a crisis hits.

We did it with the banking crash, we did it with the housing shortage, and we have done it again with the insurance crisis. Make no mistake; a crisis is exactly what it is.

Two years ago, various financial experts and journalists pointed out that the combination of low premiums and high compensation payouts was unsustainable.

They said that Quinn and Setanta were eating into their reserves to undercut the competition and sell unfeasibly low premiums. The competition, of course, had to respond in kind to stay competitive.

The various regulatory bodies missed the clues. Quinn and Setanta collapsed.

Those same journalists and economists also predicted that, eventually, the insurance companies were going to have to hike premiums to return to profitability, which is what we see now. Premiums have increased almost by 50% and look set to keep rising.

Broken system

We are witnessing what happens when we are legally bound to buy a service from a company whose goal is profit, and this is where a significant portion of the problem lies. We are required by law to cover our risk when driving in Ireland, and the state entrusts the provision of this cover to private companies.

This works fine when the market is stable, when compensation payouts are manageable, when fraudulent claims are properly punished and where the market is appropriately regulated.

Unfortunately for motorists in Ireland, the market here is in a state of chaos. We have individuals and solicitors who see any minor car accident as an opportunity to take advantage of generous judges to make a windfall.

We have an unfathomable situation whereby the losses incurred by the collapse of Setanta and Quinn have to be paid for by their former competitors (can you imagine Tesco paying for Dunnes’ mistakes?).

Of course, not one of these stakeholders wants to admit fault. Every single one of them is pointing at the other expecting them to fix it. While they’re all busy assigning blame, the motorists of Ireland are drowning in a pool of expenses.

Crisis

For the last number of months, I’ve been campaigning to try to get this issue dealt with as a matter of urgency. Because of this campaign, I regularly receive calls, emails, Facebook messages and letters from people in a state of despair. They are people who don’t know if they can afford to get to work the next day, who have had to move back in with their parents, who have had to close their business.

This is the real consequence of this crisis. It is no small weight that lies on the shoulders of motorists who already have an almost insurmountable number of costs thrust upon them. Already we have to contend with motor taxes, an inconsistent NCT service, ever-increasing fuel prices and of course regular maintenance fees which aren’t helped by the appalling state of the nation’s roads.

Motorists are besieged on all fronts, and it is not long before something will give way.

In fact, something may have already. The Motor Insurance Bureau of Ireland recently published figures showing a 17% increase in claims involving uninsured drivers. This, of course, is only going to worsen the situation, with premium costs rising as the rest of us are left to foot the bill.

Whether or not the increase is down to people not being able to afford insurance, or people just using that as an excuse is up for debate. But what is undeniable is that the current state of the insurance market is the cause of it.

Live life on our terms?

There is an ad currently being run, ironically by an insurance company, that opens with the line “we’re the first generation in history to live life on our terms”. This could not be further from the truth.

This generation, my generation, are shackled by the mistakes of institutions which should have known better. We are the ones who will be paying for the banking collapse. We have to contend with a rental market which is out of control. We are being restricted in our ability to buy a house and start a family. We are the generation which will live with our parents longer than any before.

Now, we are the generation who can scarcely afford to drive to those jobs which have become so hard to find.

Kian Griffin works full-time as a business travel consultant and has been campaigning for a reduction in motor insurance premiums. He’s also the owner of the motoring blog Ireland UnderGround.

Read: ‘Shocking figures’: Motor premiums up almost 40% in the last year

Read: This is how drivers will be protected if a motor insurance company collapses

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