Car insurance: Record number repeatedly refused quotes

Nearly 1,200 people were denied estimates by three or more insurers last year, data shows

The average cost of car insurance is estimated to have increased by over 70% since 2013, with some premiums rising at a much higher rate. Photograph: Dave Meehan

The average cost of car insurance is estimated to have increased by over 70% since 2013, with some premiums rising at a much higher rate. Photograph: Dave Meehan

 

Nearly 1,200 people were refused a quote for car insurance by three or more insurers last year, by far the highest number of multiple refusals on record.

Data released to The Irish Times by Insurance Ireland shows 1,164 people seeking cover for their vehicles were dealt with under the Declined Cases Agreement in 2015.

The agreement states that anyone denied a quote by three separate firms must be offered cover on the fourth attempt, and applications are dealt with by a committee comprising representatives of insurance companies.

The number of applications made under the Declined Cases Agreement in 2015 represents more than a six-fold increase since 2012 when 178 requests for insurance were received, and is almost double the amount received in 2014.

Figures for 2016 have not yet been compiled.

The most common reason given for repeated denials was claims history, with 373 of the 1,164 applications falling under this category, up from 298 in 2014.

The vehicle being used as a taxi/hackney accounted for 223 cases, up substantially from eight in 2014, and convictions, cancellation/non-renewal of policies and occupation were all significant factors behind the steep increase in 2015.

All applicants were eventually provided with a quote, according to Insurance Ireland, which does not compile figures on how many people ultimately manage to successfully negotiate coverage.

A recent report released by the Motor Insurers Bureau of Ireland stated there has been an 85 per cent increase in the number of uninsured drivers on Irish roads in the last five years, with observers concerned that the spiralling cost of insurance is forcing customers out of the market.

Premiums

The average cost of car insurance is estimated to have increased by over 70 per cent since 2013, with some premiums rising at a much higher rate.

In its report into the industry released in November, the Oireachtas Finance Committee accused insurers of engaging in cartel-like behaviour and encouraged more public transparency regarding claims data.

Insurers have repeatedly blamed rising costs on the presence of uninsured drivers and the high claims payouts awarded by Irish courts.

They reacted with disbelief when the recommendation for whiplash compensation was increased in the latest Book of Quantum.

The issue has previously been raised in the Oireachtas by Independent TD Tommy Broughan, who described the latest increase in declined cases as “dramatic”.

“It does seem that companies have just been gouging the public, and that they’re more interested in profits rather than making sure that everyone is insured,” he told The Irish Times.

The Society of the Irish Motor Industry (SIMI), a representative body for the sector, said the rising number of people being denied insurance multiple times was of concern.

“Insurance is compulsory, and in that context is of concern if the number of people being refused a quote is on the increase,” said SIMI deputy director general Brian Cooke.

Very expensive

While adding that firms may have very good reasons for denying quotes in some cases, he pointed to anecdotes of cover being refused because of the age of cars or their drivers in some instances.

“The bigger picture, however, is that insurance is becoming very expensive for everybody, even experienced drivers driving well-maintained cars and who have never had an insurance claim.

“This needs to be addressed as a matter of urgency,” he said.

Responding to the figures, Insurance Ireland pointed out that the number of applicants denied quotes three times represented approximately 0.05 per cent of the market, and referenced “extreme volatility” in the sector.

In a statement it said: “This extreme volatility in the claims environment increases risk and potential liability for insurers, resulting in a reduced risk appetite. Unfortunately this is impacting certain categories of insurance.

“Urgent reforms are now needed to address the spiralling cost of claims including increasing the powers of the Injuries Board to handle more claims, internationally benchmark our personal injury awards, and tackle unnecessary legal fees in the claims-settlement process.”