Insurers could be made to give drivers detailed reasons why their premiums are so high

MOTORISTS SHOULD BE given a detailed breakdown of their car insurance premium from insurance companies, an Oireachtas committee report will recommend.

The report, to be unveiled 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, the insurer would have to explain that a premium is high because a 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 individuals’ annual payments have jumped by up to 200% recently, with onerous costs also threatening the viability of many businesses that are heavily reliant on transport.

The latest figures from the CSO show that car insurance prices have risen 8.6% in the past 12 months but that costs are up nearly 50% since the end of 2011.

‘Inexplicable increases’

Over the last several months, a Joint Committee on Finance, Public Expenditure and Reform has been conducting hearings into the rising cost of car insurance.

Insurers have partially blamed the rising costs of injury claims and dealing with fraud for expensive premiums. Figures from Ireland’s major insurers show the firms registered underwriting losses worth a combined €273 million in 2015.

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

It is also to recommend that renewal notices clearly distinguish between the compulsory and discretionary parts of the insurance premium to allow consumers to make informed choices.

Other recommendations likely to be made today 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’ policies of not insuring cars that are over 10 years old.

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-claim bonuses and official documentation from other jurisdictions.

The committee also supports calls that Irish-registered vehicles be permitted to access insurance from outside Ireland in line with single-market principles.

There have also been calls for the state to step in to prevent further price hikes for customers by assuming responsibility to provide motor insurance as an essential public utility.

It’s proposed a state scheme would provide motor insurance on a progressive non-profit basis that takes account of people’s ability to pay.

Reporting by Christina Finn and Peter Bodkin