I thank the Minister for taking this Adjournment matter. Anyone who drives a car knows that insurance is outlandishly expensive here. Compared with the UK or other European countries, our insurance costs are much higher. One report has shown that the average premiums per vehicle for comprehensive cover were 50 per cent more expensive here than in the UK and 123 per cent more expensive for non-comprehensive cover.
In an article in The Examiner some weeks ago, a second 5 per cent hike in car insurance was being predicted before the end of the year. This would come on top of a 5 per cent rise in car insurance a couple of months ago. This would add £25 to the average £500 policy.
The ideal would be to try to reduce the number of road accidents which, in turn, would reduce the frequency of personal injury claims but this is easier said than done. To date, the introduction of non-jury courts for personal injury cases, the road safety and drink driving campaigns have all failed to produce substantial dividends for the motorist. The case for cheaper car insurance can be made not just in the interest of the consumer; it can also serve the wider needs of society. The existing situation, in which an estimated one in six Irish drivers have difficulty securing affordable insurance cover, is extremely disturbing. The cost of insurance for younger drivers in particular remains at prohibitive levels and must help to explain the worrying number of uninsured drivers on our roads.
Motor insurance premiums are, on average, 10 per cent more expensive because of the high level of uninsured drivers. This level could be reduced through greater control of uninsured drivers. A new and radical approach is necessary to tackle the high cost and flagrant abuse of the law caused by uninsured drivers who are estimated to represent 6 per cent of Irish motorists. A high percentage of these uninsured drivers are young drivers who find the cost of insurance extremely off-putting. On average, a young driver will have to pay between £1,500 and £2,000 for car insurance. I am paying £1,300, having driven for seven years and having had a full licence for five. I have not had any claims on my insurance during that time. I would not have bought a car if it were not necessary for this job.
This Government is trying to curb the problem of rural depopulation, yet young people are unable to live at home and travel to work due to the cost of car insurance as they are financially better off moving into urban centres. One of the main reasons for the high cost of insurance for young drivers is the fierce competition in the insurance sector which has led to widespread, below cost selling of car insurance in the premium 35-55 age group. These companies are taking the cream of the market — the low risk group — and are not quoting younger or older drivers.
The Equality Bill which states that a person may not be discriminated against on age grounds has been passed in both Houses, yet successive Governments have allowed the insurance industry to openly discriminate against young people by allowing the principle of community rating in the health sector but not in the motor sector. I am seeking a level playing pitch. We have community rating in the health sector where young people are a low risk group but not in the motor sector where they are a high risk. This is blatant inequality on the grounds of age. We should have community rating on the motor insurance market. I ask the Minister to set up an interdepartmental committee from the areas of Justice, Environment and Enterprise and Employment to tackle the broader issue of car insurance. This committee would look into the driving test system, road safety legislation enforcement and the issue which I have already highlighted relating to below cost selling of insurance within the industry. Such a committee would be an effective way of tackling the problem.
It is not all doom and gloom. This Government has started to tackle the problem through recent road safety legislation. The new 25 hour driving course for provisional drivers, which gives them between a 10 to 20 per cent discount on their first year's policy, and the report on insurance costs published by Minister Rabbitte are to be welcomed. I compliment the Minister and the Government on the work it is doing in this area but a lot more must be done to make motor insurance more acceptable to the general public.