As Minister for Finance, I am responsible for the development of the legal framework governing financial regulation. 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 such as young drivers with learner permits..
I am aware of the issue of younger drivers continuing to experience increases in their insurance premiums in spite of the fact that prices are generally in decline. Unfortunately, younger drivers have historically tended to face higher premiums as they are seen by insurers as a category which poses a higher risk. In making their individual decisions on whether to offer cover and what terms to apply, insurers will also use a combination of other rating factors, which include the age and type of the vehicle, the relevant claims record and driving experience, the number of drivers, how the car is used, etc. My understanding is that insurance companies 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 the driver, and relevant experience they may have, different insurance companies will price the risk differently. As one of the factors includes driving experience, it is acknowledged that this may impact the ability of learner drivers to obtain insurance in their own name from particular insurers, however this should not prevent them from take driving lessons with a qualified driving instructor which should assist a young driver in getting a full licence as soon as possible.
More generally, the Deputy should note that the Cost of Insurance Working Group will continue to focus on putting into place the measures proposed in its Report on the Cost of Motor Insurance. It is envisaged that the implementation of all the recommendations cumulatively, with the appropriate levels of commitment and cooperation from all relevant stakeholders, should achieve the objective of delivering fairer premiums for all consumers, including young drivers.
Finally, I would recommend younger drivers who are quoted increased premiums to consult the Competition and Consumer Protection Commission website, which has an informative section regarding the purchase of car insurance generally. One of the key tips listed to help cut costs is to “shop around” and “always get quotes from several insurance providers when you need to get or renew insurance”. In addition, I understand the Citizens Information Bureau make recommendations on things young drivers can do to reduce the cost of motor insurance, such as join a parent's insurance as a named driver as early as possible, to establish a safety record, or choosing a car with a relatively small engine, as less powerful cars are cheaper to insure.
