Rising insurance premiums are not sustainable – O’Brien

Local Independent councillor, Michael O’Brien, raised the issue of rising insurance costs at the May meeting of Athlone Municipal District held in Streamstown on Tuesday, May 3.

Cllr O’Brien called on the chamber to write to the relevant incoming Ministers to encourage them to address the issue of rising insurance premiums as a matter of urgency.

“The issue of rapidly increasing insurance premiums, and in particular car insurance, is becoming a serious issue for people in the Athlone Municipal District and indeed for people right across the country,” he said. “Official figures show the cost of premiums rose by 30 per cent in the last 12 months. This means that a policy that cost €500 last year now costs €650 this year.

“I know a female constituent, 35 years of age with full no claims bonus, who saw her premium rise from €600 to €900 in the past year. I know businesses that have fleets of cars and lorries on the road and they are telling me the soaring cost of insurance is crippling them. In the case of young drivers, it’s nearly impossible for them to afford car insurance. Farmers are also experiencing huge increases in insurance premiums and some people who may be threatened by flooding cannot get any insurance at all.”

Cllr O’Brien said the increase in insurance premiums is resulting from a combination of factors: “As a nation, we have a serious problem with our ‘claim culture’,” he said. “Our average compensation payout levels are three times higher than our European neighbours. Whiplash payouts account for up to 80 per cent of the volume of motor insurance claims in the Republic, compared with just 3 per cent in some other countries.

“There’s also been an increase in the time taken to settle these claims, resulting in a large number sitting on insurers’ books. The implication of this queue is that insurers are forced to make substantial provisions for these claims resulting in higher premiums. Over 60 per cent of the costs of claims are legal fees. The number of claims rose by 8.3 per cent last year.

“The continuation of the rising number and cost of claims, along with increasing legal fees is not sustainable for people, farmers, businesses, nor the insurance industry. It is a situation that has to be tackled immediately by any new Government and all the relevant stakeholders will have to be involved in any solution.”

The council have agreed to write to the relevant incoming Minister on the issue.

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