Tom Neville (Limerick County, Fine Gael) | Oireachtas source

As with some of the previous speakers today, this is my first speech to the House. I thank the people of County Limerick for electing me and for giving me the privilege of representing them here, which I will try to do to the best of my ability.

I welcome today's debate. I will talk in particular about motor insurance as, like the previous speaker, I come from a rural constituency. I welcome that the Department of Finance has embarked on a review of the insurance sector. Currently people are affected by huge increases in motor insurance. As these effects are serious and ongoing the review must be conducted as quickly as possible with clearly defined deadlines in order to advise on strong solutions.

The average cost of motor insurance premiums rose sharply by approximately 42% in 2012. It is now mentioned that in 2016 motor insurance costs have increased by 40%. I understand that from 2010 to 2013 the average cost per claim increased by 32% for comprehensive insurance and 56% for third party fire and theft insurance. However, the level of vehicle sales has also increased dramatically since 2012. That year there were 145,033 vehicle sales rising to 216,523 sales in 2015, an increase of 71,490 vehicles or 33% owing to the economic recovery. In three years vehicle sales rose by a third. The first quarter of 2016 had vehicle sales at 99,328 which in just three months are already 68% of the total sales of 2012. Given the extra buoyancy in vehicle sales and the knock-on effects in the number of insurance policies sold, why is there such a major increase in motor insurance? This is having a serious impact on people and was raised on a number of occasions during the general election campaign by voters in my constituency of Limerick County.

Limerick County is a rural constituency and a car is a necessity not a luxury. There is no DART or Luas in County Limerick so there is a major dependence on the motor car. Its primary function is to get to work or college and it is required for people to go about their daily lives. The rising cost of insurance will drive more young people from rural areas into the cities and towns where there is more frequent and elaborate public transport.

Last week one constituent mentioned to me that the best quote she could get on a 2005 1.9 l diesel car with a full licence and one year as a named driver on her parents' policy was more than €6,000. That was for a lady driver. This constituent wants to pursue farming and settle in a rural location, but is being priced away from the area. I am not quoting figures for souped-up Lamborghinis or Ferraris here. This was for a car to facilitate this person's life and chosen work. Such pricing of motor insurance is just not affordable.

We need to keep people in and attract more people to rural areas to keep our schools open, our sports clubs going and to further enhance and develop our communities. We must also extend this to returning emigrants who wish to return to rural areas of Ireland. I was one of those when I returned in 2013. I learned it at first hand, as without a policy in Ireland for more than three and a half years the no-claims bonus was not taken into account as it had expired beyond the two-year threshold. I believe this is still the case today.

The rational was presented of three and a half years' extra driving experience in a more challenging driving environment than County Limerick, given the city I resided in had more than 5 million people, but that was not accepted. The provision of proof of no claims was then presented but that was not accepted either. The bottom line was that as it was more than two years since there was a no-claims bonus in Ireland, as a returning emigrant any driving experience acquired before leaving was scrapped. This was against the backdrop of having more driving experience in a large city with a more challenging traffic environment. The result was an insurance cost of three times what was paid before leaving.

This policy is sending the wrong message in attracting and welcoming our emigrants home and it needs to change. A change like this would crystallise a proactive effort in bringing our sons and daughters, brothers and sisters back to rural areas of Ireland where we want and need them. They bring enhanced experience, extra economic wealth and greater international networks. This can help to bring new ideas, innovative ways, job creation and investment to rural areas. What I have said puts it in very cold economic terms; in real terms these people are missed by their loved ones.

The plight of drivers of older vehicles must be also highlighted. These vehicles, which have passed the NCT at a cost to the owner and are deemed roadworthy, are more often than not in the possession of the less well off or younger people. I would not like to see a culture develop in the insurance industry of penalising due to age of vehicle. The less well-off and younger people will feel the burden the most.

During the election campaign I met some rural mechanics running small businesses in County Limerick who said that insurance costs were hurting their businesses. These mechanics depend on general servicing of older cars, as newer cars are serviced under warranty by the large outlets. Motor services in rural areas are a major source of economic activity. These people have taken the risk to open small businesses which attract more people to the area.

It is imperative that these issues are highlighted as they represent a snapshot of life on the ground for people in County Limerick. I call on the industry to take note of the effects. Responsibility must be taken, as there is no room for bogus of fraudulent claims. I again ask the Department to prioritise the review of the insurance sector and to carry it out as soon as possible as this is a real issue for people on the ground.

See this speech in context