Business Personal Finance Calls for motorists to be given detailed breakdown of how insurance is calculated

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Motorists should be given a detailed breakdown of how their insurance cover has been calculated, a powerful Oireachtas Committee has recommended.

The Oireachtas Finance Committee wants insurers to justify why they are charging so much. It comes after claims that insurers are imposing unjustifiable hikes on motorists to rectify their own by business mistakes.

The cost of insurance has shot up in the past two years, with some drivers seeing the cost of their cover jump by 200pc.

In a report due out today, that makes 71 recommendations, the committee says drivers should be given more information on why they are being asked to pay so much more at the moment.

“The committee recommends that renewal notices should be broken down point–by- point clearly showing the individual components and associate charges that make up the total amount,” the report recommends.

Committee chairman John McGuinness says the hikes in motor cover are not justified, are having a negative impact on Irish society, and are not sustainable.

In preface to the committee’s report, Mr McGuinness says: “The price increases felt by so many citizens and businesses over the previous three years are not sustainable, and in my opinion, not justified.”

The report states that more transparency is needed on how insurance companies are reaching decisions to increase motorists’ premiums.

The committee has said it was worrying that there was a “lack of any rationale or explanation for the sudden and inexplicable increases”.

The Joint Committee on Finance, Public Expenditure and Reform also wants renewal notices to clearly distinguish between the compulsory and discretionary parts of the insurance premium to allow consumers make informed choices.

Other recommendations include giving explicit recognition that a valid NCT certification means a car is roadworthy, no matter how old it is. This is to stop some insurers denying cover to those with cars more than 15 years old.

Getting rid of paper insurance discs on windscreens is also recommended. This is a bid to make it easier to identify those with no valid insurance.

And whiplash claims should be dealt with separately, the report states.

“The Committee recommends that a special regime be put in place to deal with compensation claims arising from soft tissue and injuries,” the report states.

The Oireachtas hearings were run in conjunction with an investigation into insurance pricing by a Government working group, under the chairmanship of Finance Junior Minister Eoghan Murphy.

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