Insurers have been called on to reassess their pricing approach to younger drivers.
According to Insurance Broker www.coverinaclick.ie, motor insurance underwriters have failed to take steps to address an imbalanced pricing market in which young drivers are suffering.
Coverinaclick.ie claims the insurance companies had experienced significant losses by offering premiums that were too low and that premiums should reflect the fact younger drivers are a significantly lower risk than they were 10 years ago.
Managing Director of Coverinaclick.ie, Jonathan Hehir, said the situation faced by younger drivers in the current insurance market is “grossly unfair”.
“It seems to be generally accepted now that young drivers should have to pay vast sums more than other drivers for insurance policies,” he said.
“While premiums paid by younger drivers should be dearer to some degree, to reflect the fact that they are more likely to make claims, I think what we are seeing now is grossly unfair.
“I believe that insurers have just been trying to stay above water of late but that now is the time for them to consider their pricing strategy and realise that they can lower premiums for young drivers whilst still having a profitable business.”
Mr Hehir pointed out there were now a number of factors that make the current younger driver far safer than that of 10 or 20 years ago.
“They must complete the driver’s theory test before they can even apply for a learner permit,” he said. “First-time young drivers must complete a minimum of 12 specific driving skill lessons. Unlike the older generations, the majority of young drivers simply do not drink-drive. It is a taboo amongst that generation.
“Similarly, driving without a full licence holder has become another taboo. The education through schools has been very effective and, as a result, young people are more safety conscious. The penalty point system affects young drivers more. They are aware of this so they speed less.”
Mr Hehir suggested premiums increases need to be shared across the board.
“Traditionally, young drivers have always been classed as higher risk drivers and have always paid higher premiums,” said Mr Hehir. “There is logic in this — no doubt.”
“But the situation now has surpassed all rational thinking with young drivers, who have no previous claims or penalty points, being quoted anywhere between €3,000 to €5,000 for policies on the smallest cars available.”
The call comes just a month after the Oireachtas Finance Committee report heavily criticised the insurance industry for soaring motor insurance premiums. It found that consumers have effectively been told to accept increases without explanation and has recommended that data about insurance claims be collected by the Central Statistics Office in the hope that extra transparency could boost competition in the sector.
The report found that, on average, premiums rose 37%, but in some cases premium have risen by 200% to 300%.
Source: Irish Examiner