Frank O'Rourke (Kildare North, Fianna Fail) | Oireachtas source

I welcome the opportunity to contribute to the motion on the cost of motor insurance. It is most important that the Minister would accept the motion from Deputy Michael McGrath because of the seriousness of the situation currently and the pressure it is putting on so many individuals and families. This is a concern that is raised with me on a regular basis by my constituents. In the past week, one constituent highlighted to me that their motor insurance premium had increased from €900 to €1,300 on renewal. The car in question is seven years old and the person has a full no claims bonus. The issue is becoming most serious. Another constituent who is in the commercial haulage business is now considering moving his headquarters abroad so that he will be in a position to secure more competitive insurance for his business and compete more effectively with other transnational haulage companies that have access to lower insurance costs. As we know, consumers have been faced with an increase of 60% in the cost of their motor insurance since January 2014, and the situation is now becoming a critical one for Irish consumers and businesses, particularly haulage-related businesses.

The increasing cost of insurance is also affecting our competitiveness, and action must be taken to reverse the trends that have emerged. Not only has the increasing cost of insurance affected individuals, but it will also become a barrier to better maintaining or creating jobs in our economy. The reductions in the universal social charge in the last budget will become meaningless if the benefit is cancelled out or even exceeded by the increase in the cost of motor insurance. Much debate at election time revolves around tax cuts to help with living standards. While that is very important, not enough emphasis is placed on the cost of living, which includes the cost of motor insurance. We must focus on introducing polices that assist in reducing the cost of living and bring about a better standard of living. The motion is designed to achieve that. There is little point in sharing the benefits of a modest recovery by reducing taxes such as the USC if it is going to be cancelled by increases in motor insurance. In effect, the reduction in the USC, and more in addition to that, is transferred to the coffers of the insurance companies, which further bolsters their profits. Any reduction in the universal social charge should be a direct benefit to workers and should not be taken away by inflated insurance costs. Giving more disposable income to workers is better for the economy and provides a stimulus for growth and a benefit to local businesses. All our efforts should be focused on ensuring that we increase disposable incomes, which then become available to the economy, rather than having them grabbed by the motor insurance industry.

There are 12 key elements in our action plan to tackle motor insurance costs, and I will focus on two of them. First, we need to re-establish the Motor Insurance Advisory Board, MIAB. Given the previous track record of the MIAB, that seems to be an imperative action for the Government if we are to make progress in reducing motor insurance costs. The board should be given a specific timeline to report to the Dáil or an Oireachtas committee on its recommendations to tackle the high cost of motor insurance. The board should comprise representatives from insurance firms, the Department of Finance and the Department of Jobs, Enterprise and Innovation, motorist representative bodies, haulage companies, representatives of older people and the Road Safety Authority to examine all relevant issues that affect motor insurance premiums. The Motor Insurance Advisory Board established in the late 1990s put forward recommendations that helped reduce insurance costs by 40% in real terms between 2002 and 2013. That was a significant achievement at the time and there is no good reason not to establish such a board again.

Second, I wish to highlight the more vulnerable motorist. Those on low incomes and older people who use their own transport are particularly vulnerable to increasing insurance premiums, as increases in insurance costs eat up a greater proportion of their disposable income. Their income tends to be fixed, so if there is an increase in insurance costs they have less net income to survive and they become more vulnerable from a financial perspective, when we should be trying to make them more secure. Recently, some insurance firms have begun to restrict the availability of cover to cars older than 14 years, which often affects those on lower incomes and older people. Currently, individual insurers have the right to refuse cover, but it is not acceptable to have a blanket refusal to quote for business for vehicles older than 14 years. That could be construed as a targeted attack on the most vulnerable motorists and people in society. We must introduce legislation to limit the ability of insurance firms to refuse cover in such circumstances without a valid reason other than simply the age of the car.

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