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Have motor insurance rates reduced?

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By John Healy of Healy Insurances

The cost of motor insurance in Ireland is a well-documented topic over the past number of years. Have the increases plateaued and are reductions on the horizon? Firstly, we need to know how we got here.
The average car insurance premium in 2013 was €435. Now compare this to 2019 when it hit an average of €706.

There are a myriad of reasons for the rate increases including higher claims costs. In 2014 the limit for personal injury awards at circuit court level was increased from €38,000 to €60,000. This level of claims inflation was felt across the insurance market and was immediate. This increase did not grab national headlines and was hardly commented on outside the insurance industry at the time.

In 2015 the average circuit court award increased by 21.2% following a 13.5% increase in 2014. The upturn in the economy at this juncture led to increased traffic and consequently higher levels of accidents and claims. The average whiplash claim in Ireland stood at €15,000 compared to €5,000 in the United Kingdom.

Insurer Failures

We should recall that the insurance industry witnessed a number of insurer failures in the past number of years including Setanta, Enterprise and of course the collapse of Quinn Insurance for which consumers are still paying a 2% levy every year. Some of these failures no doubt resulted from unsustainable pricing when the claims environment was getting considerably more difficult. The EU enacted Solvency II legislation in 2016, which required insurers to hold increased capital levels to protect against the risk of insolvency. It is also likely that it hastened the withdrawal of smaller niche insurers from the Irish market.

Government Actions

Insurance has been a hot potato for Government for many years. In late 2019 the Government enacted legislation to increase the timeframe for issue of renewal notices from 15 to 20 days. There was also a multitude of extra information to be included. Any consumer who has purchased motor insurance will have noticed the massive increase in the documentation over the past year. Does this lead to lower premiums? Even an EU former chair of a regulatory institution, Gabriel Bernardino, has recently acknowledged the problem in saying “too much information kills information” and that consumers are not reading documentation received.

Insurance Cycles

The insurance market experiences cycles of expansion and contraction. An expansion is referred to as a soft market and will result in reduced premiums, more competition, and increased capacity from insurers to write business and a scramble for market share, sometimes below profitable levels. A contraction is called a hard market and typically results in higher premiums, less completion and capacity to write business, and withdrawal of insurers from sectors. While the profits of motor insurers can be in the millions it is perhaps more reflective to note that their combined operating ratio (underwriting margin in other words) is often at 5% or lower.

Is Ireland entering a soft market for motor insurance premiums?

According to Insurance Ireland, a representative body, there have been reductions of 9% in 2019 with a further 6.5% in 2020. According to the Central Bank, the average premium at the end of 2020 was €653. For comparison purposes, the average comprehensive car insurance in the UK was €882 in the last quarter of 2020 and in France, the average cost is between €700 and €900 depending on regions.

The new personal injury guidelines will have a positive impact on premiums but this will take time to wash through the legal system. COVID-19 has certainly meant much reduced traffic on the roads and this should feed into lower claims and thus lower costs.

At Healy Insurances, we surveyed over 120 of our customers over the month of May and found that the average year on year car insurance reduction was 15% from 2020 to 2021.
The current reductions on rates are likely due to the benign claims environment over the past year rather than the changes to the personal injury guidelines.

The question is; will reductions continue as the economy continues to reopen and emerge from the pandemic?

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Documents for driving abroad in Europe

By John Healy of Healy Insurances As of August 2021, a green card (or international motor insurance card) is no longer required for travel in the European Economic Area. This […]

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By John Healy of Healy Insurances

As of August 2021, a green card (or international motor insurance card) is no longer required for travel in the European Economic Area.

This area includes all the European Union countries plus Iceland, Liechtenstein and Norway. You also don’t need a green card for Andorra, Bosnia and Herzegovina, Serbia and Switzerland.

If you are travelling with your vehicle to the named counties you will still need to bring:

Your certificate of motor insurance
Your vehicle licencing certificate
Your driving licence
Your passport

If you are taking a company owned, hired or borrowed vehicle, you will need a letter of authorisation from the registered owner along with the vehicle licencing certificate.

It is important to check the legal requirements for the country you are driving in. Some EU countries including France will require you to carry the following items:

Reflective jackets for each occupant of the vehicle
Warning triangle
Headlamp beam deflectors
Breathalyser test
Spare bulb kit
First Aid Kit (compulsory in Austria, France and Germany)

It is advisable to have your travel insurance details, European breakdown cover details, health insurance details and your European Health Insurance card in your possession. Travel safe.

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Make your property look as appealing as possible

By Ted Healy of DNG TED HEALY Over the past few weeks we have looked at ways of spring cleaning our homes in preparation for going to the market. The […]

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By Ted Healy of DNG TED HEALY

Over the past few weeks we have looked at ways of spring cleaning our homes in preparation for going to the market. The final step and one of the most important is the kerb appeal of your home.

The exterior of your property is going to attract would-be buyers, it is a simple fact.

So let’s get it looking as well as we possibly can.

Our aim should be to make your property look as appealing as possible, to as many people as possible, ultimately leading to a higher selling price in a quicker timeframe.

Remember that first impressions last. After a long winter, things may not be looking their best in the garden but with the onset of spring and the warm sunny (hopefully) summer evenings, comes the opportunity in presenting our outdoor spaces in the best possible light.

Cut the lawns, brush the driveway, weed the flower beds, get those flower baskets and window boxes out. Lay out the patio furniture.

Do your footpaths/patio areas need a power hose?
How are the rainwater gutters – remove any debris/growth from them.

How’s the paintwork, are there any areas of peeling paint that need touching up?
Perhaps give the front door a lift with a new coat of paint.

Improving how your property looks from the outside is as important as how it feels once you’re inside, yet it often gets overlooked.

Remember our home is our most valuable asset so why not get it looking its very best. We get one chance to make that first impression so make it last, it will pay off.

For anyone considering selling their property or looking for advice on how best to prepare it for sale, contact DNG Ted Healy on 064 6639000 or killarney@dng.ie.

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