Car insurance costs threaten the economy, TD warns

The Oireachtas Committee on Finance is to bring the representatives of motor insurance companies, the Central Bank and the Department of Finance before it to discuss the spiralling cost of car insurance.

The committee will invite the Minister of State at the Department of Finance Eoghan Murphy, the Motor Insurance Bureau of Ireland, the Bar Council of Ireland and consumer groups to consider the problem.

Chairman of the committee John McGuinness said the cost of motor insurance had become a “threat to the economy”.

“We need to establish the reasons behind the increase and to find proposals that work for everybody,” he said.

“Some action has to be taken and we hope that we can provide a report making recommendations and action is taken on foot of it.

Unsustainable

“The current costs are unsustainable and a threat to every aspect of the economy.”

The latest figures from the Central Statistics Office (CSO) show the cost of motor insurance has risen by 38.3 per cent in just 12 months.

The picture over an extended period is even bleaker, with the cost of car insurance said to have climbed by 70 per cent over just three years.

Mr Murphy, who has been delegated responsibility for this area by Minister for Finance Michael Noonan, said a taskforce had been established within the department to examine motor insurance as a priority.

Private meetings

He said the next meeting was scheduled for September 1st but said he has held a series of meetings with stakeholders privately.

He hoped a series of measures could be announced in October.

Sinn Féin TD Pearse Doherty tabled a proposal previously to have such hearings and Mr McGuinness has agreed to facilitate them.

Mr Doherty said a strong message needed to be sent to the industry that “excuses are no longer good enough and that it must face up to its responsibility to explain its huge increases, which are sometimes multiples of premiums from one year to the next”.

“As long as the real core issues are skirted around, Irish drivers will be always at the whim of the insurers’ ups and downs regardless of how many policy changes are made by the State or its bodies.”

The meetings will begin in the first week of September and a report will be compiled by the end of the month.