Motor insurance premiums in Ireland have continued to rise, with the average cost reaching €616 in the first half of last year, or €67 higher than in 2022, according to a report from The Irish Sun.
This marks a 12% increase over two years and has renewed concerns about insurance affordability amid the ongoing cost-of-living crisis.
After initially falling following the introduction of personal injury guidelines in 2021, which aimed to reduce compensation awards, premiums have started to increase again. This trend has raised questions among motorists, businesses, and community groups about the effectiveness of the reforms and the outlook for insurance costs.
Senator Linda Nelson Murray (pictured) described the 2021 guidelines as a key reform designed to bring Ireland’s compensation levels closer to those of other countries. She noted that awards there had been significantly higher at times, reaching up to 440% more than in England.
Murray expressed concern over a recent Judicial Council recommendation to raise personal injury awards by nearly 17%, warning this could increase pressure on individuals and organisations already dealing with rising premiums.
Data from 2019 to 2023 shows a 40% drop in personal injury claims related to businesses and public spaces. Claims involving cafés, hotels, and restaurants more than halved, shops saw a 44% decrease, and sports and recreational facilities reported a 38% reduction. In childcare, which has faced high insurance costs, 256 claims were recorded over five years compared to nearly 170,000 children enrolled in 2020/21.
According to Murray, this data suggests that the guidelines have helped reduce claims and ease insurance costs. She cautioned that increasing awards now could reverse this progress and affect insurance availability and affordability.
The National Claims Information Database’s 2023 Liability Report found average legal costs were under €1,000 when claims were settled through the Injuries Resolution Board, compared to over €23,000 for cases resolved through litigation. Compensation amounts were similar either way.
Murray noted legal costs remain a concern and could rise if more claims go to court due to higher awards. Despite the last award change in 2022, Ireland’s insurance costs remain above those of many European countries.
A Central Bank report showed motor premiums rose 9% in the first half of last year, with younger drivers among the most affected.
Murray highlighted ongoing difficulties for small businesses, charities, and community groups in securing affordable insurance and called for further reforms. The government’s public consultation on its Action Plan on Insurance Reform is open until May 19, and Murray urged those affected to participate.
She also called on the Minister for Justice to pause or delay any increase in personal injury awards to help stabilise premiums, framing this as a key test of the government’s commitment to reducing insurance costs.
