Auto Insurance out of Control in Ireland

Date: 30 DEC 2016posted by Car Rentaledited by WinX

According to new figures, the number of uninsured vehicles in Ireland has almost doubled over the last five years. Privately owned vehicles that do not have insurance increased from just over 85,000 in 2011 to 151,392 last month, which represents a growth of 4.5% to 7.4% of total vehicles in Ireland which do have have insurance. The Motor Insurers' Bureau of Ireland issued a warning recently, reminding drivers risk large fines, having their vehicle seized and receiving an automatic court appearance or five penalty points if they are caught without proper cover. And in the case of an accident, the bureau may pursue the driver for costs under their right of recovery.

However, the rising cost of premiums, along with motorists being refused a quote for insurance are major factors for the rise uninsured vehicles on the road. Protests have broken out due to motorists feeling unjustified in the price increase for insurance. The average cost of auto insurance is estimated to have increased by over 70 percent since 2013, and as much as 38 percent over the last year, along with premiums rising at a much higher rate. The Oireachtas Finance Committee released a report in November, in which they accused insurers of engaging in cartel-like behavior and encouraged that they share data amongst themselves to make the cost of premiums more transparent.

Witnesses who appeared before the committee - except for the insurance industry itself - had highlighted the absence of data-sharing and a complete absence of transparency across the sector as a serious problem. This lack of information made finding the root problem for the cause of insurance price hikes impossible. The committee also called upon the central bank to intervene and protect motorists against insurance premium hikes which have risen by 300 percent. "From around 2012/2013, investment income dried up," the report said. "Guaranteed returns of 4 percent on government bonds disappeared. Insurance companies rushed to plug gaping holes by burning through their capital reserves. The net impact is that the insurance companies lost a lot of money and, with motor insurance comprising 40 percent of the total market in Ireland, the obvious and soft means of recapitalizing [was] to target motor insurance premiums." Case studies showed a man had his insurance increase by almost double even when his main mode of transportation was cycling and uses his 16-year-old Honda under a few thousand miles a year. The reason he was given, the cars age even though the Honda has under 30,000 miles on the odometer and is in good condition.

Although people refused for a quote for insurance are only a fraction of the problem, it still represents the lack of protection motorists may face from insurance companies if the central bank refuses to intervene. The new data shows 1164 people were seeking insurance but was dealt with the Decline Cases Agreement in 2015. Under this agreement, anyone who is refused a quote from three different insurers must be offered a quote on the fourth attempt. The number of people who have been refused a quote has doubled since 2014. The insurance companies released the main reason given for the denial of a quote was due to claims history with 373 people addressed on this ground. The second most given reason was the vehicle was being used as a taxi at 223. Convictions, policy cancellations and occupations are all factors in being denied a quote. Driving on the road without valid motor insurance is a strict legal obligation which carries a heavy price of those who don't comply. But at the same time suffering motorists feel exploited and abandoned which has made their choice to go without insurance coverage and risk the consequences not because they want to, but because they have to.

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