Both the BBC and the Belfast Telegraph this week ran the story that the Consumer Council have asked the Office for Fair Trading to look at the car insurance market here in Northern Ireland.
It appears that the average price for insurance in Northern Ireland is £924 which is apparently a 74% increase in the last two years. For younger drivers the rise has been 112%. Prices are on average 84% higher than those in mainland GB.
The Consumer Council campaign has four parts (from the Belfast Telegraph):
A formal submission to the Office of Fair Trading (OFT) to enable it to examine the car insurance market.
An online ‘Lower Car Insurance’ petition launched for drivers to pledge their support.
Calls for the Department for Justice and the Assembly’s Justice Committee to examine the impact of the costs associated with claims.
Plans to meet the Environment Minister Alex Attwood to ask for practical initiatives to support younger drivers.
The usual explanations for the higher costs of insurance here are the higher number of uninsured drivers: which the higher cost of insurance can only increase and as such can become something of a vicious circle. In addition the higher cost of insurance claims here with much more paid to claimants: a minor whiplash claim in NI gets up to £8000 whereas in GB it gets £500 to £2000. Again there might be a bit of a vicious circle issue here. If people pay so much for insurance they are possibly more likely to make claims on other people’s insurance in the event of an accident. There is also the issue of fraudulent claims: things such as minor whiplash are hard to prove but equally hard (and expensive) for the insurance companies to disprove: often cheaper to pay out the money but then of course that needs to be recouped from the motorist.
Whilst there is probably some merit in the claims by the insurance industry that insuring people in Northern Ireland is more expensive, the cost differential seems unreasonable. The solution, however, requires action from many quarters. Action should be taken against uninsured drivers but probably more importantly compensation settlements should be reduced to the same level as GB and claims for those who were not actually injured should be thrown out whilst those made dishonestly should result in prosecution.
It is completely unreasonable to expect young people who often need the car in order to go to work or university to pay several times the value of the vehicle to insure it. As so often it is the poorer and younger in society who suffer disproportionately from the price of insurance.