2 October 2001: The National Youth Council of Ireland yesterday launched a report on young drivers and motor insurance entitled "The Plunder Years". The report outlines the high and escalating cost of motor insurance for young drivers, details the causes and recommends a range of measures and actions that the Government must take to address the growing crisis of insurance costs, not just for young drivers but for all drivers.

While young drivers on a provisional licence have long endured high insurance premiums, the NYCI report found that young male drivers with a full licence for a number of years and a good driving record were still paying between £2000 and £3000 for third party insurance.

NYCI found that a 24 year old male driver with a full licence for two years and two years’ no claims bonus, living in Dublin (which has a low accident rate) was quoted £2213 to insure a 1998 Fiat Punto.

The NYCI report also found that many young drivers are forced to pay insurance premiums by instalment as a result of the high insurance costs. This form of payment incurs an interest charge of 18.6%. This has resulted in a growing number of young drivers (20%) taking out loans to pay their premiums.

In light of the fact that motor insurance costs in Ireland are almost double the EU average and are set to rise next year at four times the rate of inflation, NYCI believes that the current cost of motor insurance for young drivers is not justified on economic grounds.
NYCI is seeking Government action to:
• Reduce the cost of motor insurance in Ireland
• Reduce the excessive cost of motor insurance for young drivers

NYCI believes that the Government needs to adopt an overall strategy that address the following:
• The continuing high number of road accidents
• The high cost of claims and legal costs
• The lack of consumer information and protection
• Inadequate competition
• Lack of incentives for good driving records
• Inadequate regulation, information and research in to the insurance industry

As a demonstration of its commitment to tackling the current crisis in motor insurance NYCI is calling on the Government to abolish the 2% Government levy on all motor insurance premiums. This levy adds a further £60 for a young driver paying £3000.

NYCI is also proposing good driving record rebate. All drivers paying more than £1500 for motor insurance with an accident free record would be entitled to a rebate funded by a levy on the profits of insurance companies. This would encourage safe driving, while offering some respite to the hard-pressed young driver.

NYCI is also calling for an immediate investigation by the Competition Authority to examine the competitiveness of the insurance industry. Over the last ten years the number of active motor insurers in Ireland has reduced from 25 to 12. This has driven up prices, particularly for young drivers.

"With motor insurance prices soaring NYCI believes that Government action to address the inadequate competition, lack of consumer protection, inadequate regulation in the insurance market and the continuing high level of road accidents is urgently required. In particular the Government needs to tackle the outrageous prices. Young drivers are forced to pay for motor insurance. Without a proper public transport system and with motor insurance being compulsory by law, young drivers are not in a position to simply take it or leave it. Government has a social responsibility to end the current exploitation of young drivers, to call a halt to the plunder", NYCI President James Doorley concluded. WT