Why the motor insurance premiums are on the rise in Ireland?
The costs associated with driving keep increasing. One of those being the cost of insurance premiums. In fact, in Ireland, costs have gone up at least 30%.
Citizens are angry at insurance companies because they think the increase is to line their pockets, but that may not be the reason at all. There are factors that determine the costs, and those factors can make the amount go up or down.
Here are a few things that affect Motor Insurance cost in Ireland.
- Increased Legal Costs
- Safety Technology
- Younger Drivers
- Increased Personal Injury Awards
Increased Legal Costs
When someone takes you to court because of an accident or injury, the court costs involved are quite high. In the Courts, Lawyers often make exaggerated claims to get the highest award for their clients. When these claims are awarded, the car insurance companies are the ones to pay, so naturally, premiums will go up to compensate.
Increased Personal Injury Awards
In cases of personal injury, the amounts awarded equal as much as €15000. When amounts like this are being paid out for claims, the natural occurrence is that costs will rise to compensate for the loss in revenue. In years where there were a lot of car collisions, expect the costs to be higher to cover losses.
One big issue in Ireland is the amount of “whiplash” claims. This is such a big problem due to people faking this type of injury, The Civil Liability Act is designed to cut down on the volume of this type of claim.
Safety Technology
Although this is something beneficial and helps to avoid many accidents, the technology itself is expensive to repair when it breaks down. Technology like satnav, backing cameras, lane-departure warning, blind-spot detection are all things designed to make cars and driving safer.
But when these have to be repaired due to accidents or damage, the costs are rolled over to the premiums.
Young Drivers
According to the survey by the AA Ireland (A leading car insurance company in Ireland), statistics show that drivers between the ages of 16-19 are 3X more likely to be in a fatal car crash than older drivers. Factors such as distractibility, inexperience, and not observing street signs are present in younger drivers that older drivers may not be subject to. With age comes experience and maturity.
photo supplied, courtesy of guest blogging network
Here are some reasons associated with teen car collisions:
- Driver inexperience
- Distracted driving
- Reckless driving
- Not wearing safety belts
- Texting and driving
- Drinking and Driving
These are not associated with teens only, but a majority of the time, in accidents with teen drivers one of these reasons were involved. At what age does car insurance go down? Most insurance companies consider 25 years old to be the age of more responsible drivers. Premiums are lowered at this point, even more for safe driving instruction.
Theft
According to The Association of British Insurers, car thieves can hack into the data (signal) sent when key fobs are used to open car doors. They later use this information to steal vehicles. The industry paid out £376m for incidents of car theft last year, an increase of 27 percent more than in 2017.
Fraud
Fraudulent activities have increased the amount of compensation awarded by insurance companies. In Ireland, there are increasing cases of “staged” accidents. People conspire to stage accidents and fake injuries to receive higher rewards. The insurance companies have to increase premiums to compensate.
Even with insurance costs on the rise, there are ways to manage the costs and keep them within your budget. Talk to your insurance representative about ways you can lower your premiums.
Author: Umesh Joshi
