Written answers

Wednesday, 11 July 2018

Department of Finance

Motor Insurance Costs

Photo of John CurranJohn Curran (Dublin Mid West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

103. To ask the Minister for Finance if his attention has been drawn to the rise in the number of motor vehicles being scrapped each year in view of the fact owners are either failing to get motor insurance quotes or are receiving prohibitively expensive quotes; the steps he will take with the motor insurance industry to address this issue; and if he will make a statement on the matter. [30687/18]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

While the issue of "End of Life" Vehicles does not fall under the remit of my Department, I am aware that there is a motor industry group which is highlighting what they consider to be a link between the number of cars being scrapped annually and the lack of availability or the higher price of motor insurance for such cars. In this respect, Minister of State Michael D’Arcy TD met last week with the group to listen to their concerns. He has asked the group to submit more information on aspects of their conclusions as they relate to insurance. I also understand that the Minister of State intends to write to Insurance Ireland on foot of this in order to try and get a more detailed perspective on the matter of insurance for older cars.

I would like to reiterate however that neither I, nor the Central Bank of Ireland can interfere in the provision or pricing of insurance products, as these matters are of a commercial nature, and are determined by insurance companies based on an assessment of the risks they are willing to accept. This position is reinforced by the EU framework for insurance which expressly prohibits Member States from adopting rules which require insurance companies to obtain prior approval of the pricing or terms and conditions of insurance products. Consequently, I am not in a position to direct insurance companies as to the pricing level or terms or conditions that they should apply in respect of particular categories of drivers or vehicles.

I understand that motor insurers use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. Factors include those such as the age of the vehicle, as well as the type of vehicle, the age of the driver, the relevant driving experience, the claims record, the number of drivers, and how the vehicle is used. Insurers do not all use the same combination of rating factors, and as a result prices and availability of cover varies across the market. In addition, insurance companies will price in accordance with their own past claims experience, meaning that in relation to the age of a vehicle and the availability of cover, different insurance companies will use different age thresholds.

Notwithstanding the above, my officials are engaging with Insurance Ireland in relation to the availability and cost of insurance for older cars, and have been informed that certain insurance providers have recently changed their acceptance criteria and increased their vehicle age threshold levels.

Comments

No comments

Log in or join to post a public comment.