Dáil Éireann Debate, Tuesday - 19 October 2021
364. Deputy Catherine Murphy asked the Minister for Finance if he has engaged with insurance companies and or their representative bodies in respect of insurance providers refusing to provide quotes and or premiums to persons wishing to insure roadworthy and NCT compliant cars over a certain age; if his attention has been drawn to this practice; and the steps he is taking to remedy it. [50598/21]
View answerAs the outset, let me state neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products, as this is a commercial matter which individual companies assess on a case-by-case basis. This position is reinforced by the EU Single Market framework for insurance (the Solvency II Directive).
While NCT policy is the responsibility of the Minister for Transport, from an insurance perspective, I understand that it is a minimum requirement of roadworthiness and insurers will generally require a car to have a valid NCT in order to be covered. However, it is not the only rating factor considered in the provision of motor insurance, therefore having a valid NCT does not automatically mean that an insurer will offer cover. Insurers use a combination of rating factors in making their individual decisions on whether to offer cover and what terms to apply. This may include the age of the vehicle, as well as other factors such as the driver’s age; relevant driving experience; the type of vehicle; and so on. Insurers do not all use the same combination of rating factors, and as a result prices vary across the market.
Insurance companies will also price and offer cover in accordance with their own past claims experience, meaning that in relation to the age of a vehicle and the availability of cover, different insurers will use different age thresholds. However, I understand that in recent years a number of providers have changed their acceptance criteria and increased their vehicle age threshold levels.
With respect to refusals to quote for an older vehicle, it may interest the Deputy to know that under the terms of the Declined Cases Agreement (DCA), which is adhered to by all motor insurers in Ireland, the insurance market will not refuse to provide motor insurance to an individual if he or she has approached at least three insurers and has not been able to obtain cover from them. The relevant e-mail address for the DCA is: declined@insuranceireland.eu.
According to figures from Insurance Ireland, the numbers applying to the DCA have been reducing in recent years, having peaked in 2016. I believe this downward trend demonstrates that insurance reform is having a positive impact on both the availability and the cost of motor insurance. In this regard, the latest Central Statistics Office data shows that motor insurance prices are now 36.6% lower than their peak in July 2016.
It is the Government’s intention that this positive downward trend continues through the implementation of the Action Plan for Insurance Reform. In particular, it is expected that the Personal Injuries Guidelines, which have on average halved award levels for many injuries, should in time lead to lower premiums for customers, including motorists. In his ongoing engagement, Minister of State Fleming has emphasised the need for insurers to reflect the savings from this key reform both by reducing premiums and increasing their risk appetite to provide cover in new areas. We will continue to hold industry to account on its commitments to pass on savings from the Guidelines and other key actions to customers, as the insurance reform agenda progresses.
