asked the Minister for Industry, Commerce and Energy if he is aware of the marked increase in car insurances; and, if so, the reasons.
Ceisteanna—Questions. Oral Answers. - Car Insurance.
11.
I am aware that increases in motor insurance granted to individual motor insurers in 1978 following consideration by the National Prices Commission did have the effect of substantially increasing the cost of motor insurance for certain vehicle owners. The increases varied from company to company and higher increases have been applied to third party liability in which the companies losses were highest. In other cases, such as comprehensive insurance, there have been some reductions in motor insurance costs.
The primary reason for the recent increase was the continued rise in the costs of claims resulting in turn from increases in the various elements in the claims and some rise in the frequency of accidents.
Does the Minister not accept that the marked increase in car insurance since the change of Government offsets the benefits accruing to motorists from the abolition of the road tax, or almost offsets it? Is the Minister further aware that it is almost impossible—except for those who are really well-off—for young people to get car insurance at present? Surely the Minister will accept that young persons between the ages of 17 and 25 need cars to go about their work the same as other adults and that something should be done about this car insurance because many people believe there is a great deal of racketeering attached to it?
As far as the first part of the Deputy's question is concerned—about the benefits of the removal of car tax being eroded—I do not accept that. I accept that there is a problem in the motor insurance field, firstly, in the level of premiums and, secondly, in the availability of cover. With this in mind I arranged a meeting in my Department with the heads of all the insurers operating in this country. I had them in the Department about a fortnight ago. There is a review of the whole availability of motor insurance being undertaken at present by the individual companies. They are expected to come back and see me within the next month to six weeks. If the Deputy would like to put down a further question in a couple of months time, I will give him the results of that review.
I am glad the Minister met the executives of these companies. Would he use his good offices—as I have no doubt he will—to try to get a fair deal for applicants for insurance in the 18 to 25 age group? As I have said already and as the Minister is himself aware, the demands being made on these people by insurance companies are out of proportion to what would be a reasonable figure and are far in excess of corresponding demands being made on similar people in Britain and Northern Ireland.
I have had the insurance companies in my Department and I will be discussing the matter further with them. It is important to mention that in calculating the increases given account was taken of the increase in frequency and average cost of claims up to 31 December last and projections for 1979—the increases were based on those figures. Of course the increase in the cost of claims is due mainly to factors such as the high level of court awards in cases of personal injury liability, the dramatic rise in the cost of motor vehicles, the constantly increasing cost of repairing vehicles and the increase in hospital charges which have to be taken into account when assessing premiums.
Might I ask the Minister if he can in his investigations allay the confusion, not to say the annoyance, of those of us who are aware of the great difference—to our detriment—between the cost of insurance in the Six Counties and in England and the cost of similar insurance here by the same companies? There is no logical explanation that those of us on the outside can deduce. Perhaps the Minister may have some such explanation.
I do not, but I will have it queried.
Might I ask the Minister, in the context of this whole question, if he has investigated or will investigate particularly and specifically the area to which he referred of increasing car repair costs, particularly in regard to the degree of alleged exploitation and abuse in cases where it is clear to the repairer that the car is involved in an insurance claim? Is it not a fact that this is widely accepted as being the primary cause of inflation in car insurance?
I will have the Deputy's remarks taken into account. The whole matter is being investigated.
Might I ask the Minister to bear in mind that the incidence of high cost of repairs and replacements arising from accidents is highlighted by virtue of the fact that spares and parts are infinitely cheaper in the Six Counties and in England than they are here? It seems to be a vicious circle: that we create the increased cost by heavy duties and then we complain about this incidence in the insurance factor.
I am having the whole area investigated at present.