Revealed – How much are Northern Ireland car insurance premiums rising?

A recent study by the Office for National Statistics has shed light on the rise in car insurance premiums in Northern Ireland, revealing a staggering 42% increase in the last financial year. This jump makes many drivers question the fairness and transparency of their insurance costs, notes BBC News.

In response to rising premiums, the government created a task force aimed at tackling these issues. Transport Secretary Louise Hay has described the rising cost of car insurance as a serious concern, stressing that affordable insurance is “an essential, not a luxury”. The task force will consist of industry experts, consumer advocates and regulators, all tasked with identifying the root causes of these rising costs.

The disturbing statistics from the Office for National Statistics have caused a wave of concern among various stakeholders. According to Robin Swann, Ulster Unionist MP, the unique circumstances of Northern Ireland should be taken into account. He noted that “if there are specific problems in Northern Ireland, they should be dealt with equally with those affecting the rest of the United Kingdom”.

Car insurance in Northern Ireland

Several factors are contributing to the rising cost of car insurance in Northern Ireland. Mark Shepherd, head of general insurance policy at the Association of British Insurers, pointed out that inflation, rising levels of vehicle theft and rising parts and labor costs were driving premiums higher. Additionally, the complexity and cost of modern vehicle repairs are important factors in the overall insurance landscape, according to BBC News.

An Ernst & Young analysis from 2023 revealed that insurers face unbearable financial pressure, paying out £1.13 in claims and expenses for every £1 they collect in premiums. This disparity has raised questions about the viability of the current insurance market as insurers struggle to remain profitable amid rising payouts.

In addition, the distinctive dynamics of the Northern Irish market compound the problem. According to Shepherd, the region experiences “higher proportional rates of road traffic deaths and serious injuries than the rest of the UK”. This statistic not only affects insurance costs, but also reflects wider road safety concerns.

Swan also highlighted that higher compensation rates in Northern Ireland for minor injuries resulting from road traffic accidents were contributing to the overall increase in premiums. Unlike England and Wales, where fixed compensation tariffs have been introduced, Northern Ireland has not yet passed such legislation.

However, hope for relief may be on the horizon. A government review focused on personal injury claims could lead to an average reduction of around £90 on car insurance premiums in Northern Ireland. The review looked at the impact of changing interest rates on benefit payouts, suggesting the adjustments could allow insurers to lower premiums across the board.

What can cause insurance premiums to rise? Share your thoughts in the comments below.