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The Question: Why is the price of car insurance going up?

Is it down to more claims and bigger awards – or a race to get back to profitability?

Crash course: the cost of Irish car insurance rose by 32 per cent in the year to March. Photograph: Peter Dazeley/Photographer’s Choice/Getty

While motor costs are going down around the world, here at home the cost of insuring your car has spiralled. According to the Central Statistics Office, the cost of car insurance rose by 32 per cent in the year to March.

Insurance companies blame an increase in the number of personal-injury claims brought to court, and a jump in the size of awards given out, but the Injuries Board has quoted CSO figures showing fewer claims going to court and only a small increase in the size of awards.

Insurers have also blamed underpricing by rivals, which they say forced them to cut their prices, in order to compete.

When Quinn Insurance entered the car-insurance marketplace, in 1990, it did so with all engines revving, aggressively driving down premiums. This spurred other insurers to follow Quinn down discount alley, and the result was happy days for male drivers under the age of 25, who until then had been paying very high premiums. But when the global economy crashed, Quinn Insurance ran into the ditch.

The recent rise in prices, say insurers, is simply the industry going back to more realistic rates.

Although the Government and regulators might be buying that line, some say the insurers’ explanation is straight out of a car repairman’s garage.

The real explanation, according to a briefing document prepared for Minister for Transport Paschal Donohoe and obtained by The Irish Times under the Freedom of Information Act, is that insurers are racing to get back to profitability after years of being forced by a competitive market to give car owners decent deals.

As safety technology powers forward, leading to fewer crashes and generally safer driving (or self-driving), we have been promised lower premiums – but, like those jet packs we were told about, we may be waiting a while yet.