Motor insurance premiums rise for ninth month in a row as inflation rate holds steady

Motor insurance costs are up for the ninth month in a row.

Figures from the Central Statistics Office (CSO) show that inflation was 2.6pc in May. This is the same rate that was recorded in April.

CSO statisticians said it was the seventh time since September 2021 that the annual growth in the prices index, which is the official measure of inflation, has been below 5pc.

Motor insurance costs were up by 7.4pc in May, compared with a year ago. It was the ninth month in a row of rising car insurance costs. They started rising in September last year, and continue to do so despite a raft of reforms being brought in to benefit insurance companies.

Insurers say motorists are making more claims, and that it costs more to repair cars damaged in accidents.

Home insurance costs are up 5.8pc in the past year, while health insurance prices are up 11.9pc, the CSO said.

Consumer prices in May rose by 0.5pc in the month. This was mainly due to an increase in the cost of hotel accommodation and higher prices for alcoholic drinks and food consumed in licensed premises, restaurants, and cafes.

Motorists are paying more for fuel, with petrol prices up 14.5pc since May last year, while diesel prices are up by 17.5pc, the CSO said.

Last month saw higher prices for airfares, motor cars and the maintenance and repair of personal transport equipment. Consumers have also been hit with higher prices for package holidays, costs associated with recreational and sporting services and cultural services.

Clothing and footwear prices decreased, which compared with May last year, due to sales.

CSO statistician Anthony Dawson said there were price increases in May for a 2.5kg bag of potatoes, which was up by 59c. Irish cheddar cheese per kg was 5c more expensive, while there were decreases in the price of an 800g loaf of white sliced pan, by 6c. A pound of butter was down by 5c.

Milk fell in price when compared with May last year, Mr Dawson said.

Experts have pointed out that a flat reading for the rate of inflation in May does not mean prices are coming down. The figures mean prices are still going up, but just not rising as fast as previously.

Such has been the rapid rises in prices in the last two years that experts believe 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.

Paul Walsh, spokesman for Peopl Insurance, said the figures show that the rate of inflation continues to be below 3pc and is a fraction of what it was this time last year – when annual inflation stood at 6.1pc. However, he said the reality is that prices are still rising and even if they are doing so at a slower rate, this will still be a challenge for many households as it comes against the backdrop of the record-high inflation of recent years.

Mr Walsh said the carbon-tax increases which kicked in at the start of May will push up the cost of home-heating oil, coal, briquettes and gas for consumers. This will make it more expensive for consumers to heat their homes.

“It is clear that Irish households will be feeling the impact of the record-high inflation of recent years for some time yet,” he said.