Car insurance premiums rise for 10th month in a row despite ‘progress’ on reducing costs

It comes after motor insurance premiums rose for the 10th month in a row in June, with house insurance costs also up.

The Central Statistics Office (CSO) said the cost of motor insurance increased by 8.3pc over the last year to June.

Insurers have blamed the rise in premiums on a higher number, and increased value, of damages claims to vehicles.

Home insurance costs increased by 7.4pc in June.

The Government has introduced a large number of reforms in an attempt to bring down the cost of insurance for motorists, homeowners, businesses and charities.

These include legislating to change the guidelines on payouts for minor injuries after the State’s judges agreed to lower recommended award levels.

The State’s Injuries Resolution Board has also been reformed. It is cheaper for insurers and consumers to use because legal costs are a fraction of those for cases that are litigated.

There has been a dedicated garda ­insurance fraud unit set up, with changes to duty-of-care legislation, making it harder for those exaggerating compensation claims.

Peopl Insurance’s Paul Walsh said there had been “great progress in reducing the cost of claims and motor insurance premiums in recent years”.

However, a recent report from the ­Central Bank showed that following a trend of average premiums falling since the second half of 2017, motor insurance premiums were increasing.

“The rise in the cost of car repairs, and consequently damage claims, is one of the things likely to be pushing up motor insurance premiums,” he said.

Mr Walsh said that if the cost of damage claims continued to go up, so too would the rate of increases in motor premiums.

“It is important that the progress made on motor insurance costs and claims costs in recent years is not undone,” he said.

Mr Walsh said the cost of home repairs had also increased substantially in recent years. This meant it was crucial that homeowners continued to buy home insurance. He said the rising cost of home insurance was a worry, since more people could find themselves struggling to afford it.

The CSO said the overall rate of inflation fell slightly in June, despite the rise in motor premiums.

The Consumer Price Index, which measures inflation, rose by 2.2pc between June last year and June this year. This was the lowest rate of increase in three years.

This rate of increase was down from an annual rate of 2.6pc in the year to May this year, the CSO said.

This is the eighth time since September 2021 that the annual growth in the Consumer Price Index has been below 5pc.

Prices of goods and services rose by 0.4pc in the month of June.

Experts have pointed out that the lower reading for the rate of inflation in June does not mean that prices are coming down.

The figures show prices are still going up, but just not rising as fast as they were previously.

Such has been the rapid rises in ­prices in the last two years, experts said it could take at least two years before people get back the purchasing power and standard of living they had before inflation took off after the Russian invasion of Ukraine.

Cumulatively, prices of goods and services have risen by around 20pc over the last two years.

Food and non-alcoholic beverage prices were up 2.1pc in the year to June.

CSO statistician Anthony Dawson said there had been a price increase in June this year for a 2.5kg bag of potatoes, which was up by 70c.

Wet weather earlier in the year has led to a shortage of potatoes.

Mr Dawson said the price of Irish cheddar cheese decreased in June by 13c per kilogram.

An 800g loaf of white sliced pan fell by 5c and two litres of full-fat milk was 4c cheaper when compared with June last year.