A chara, – Sean Connolly (Letters, 8 SeptSeptember 8th) writes that he was not unduly surprised by the 30 per cent increase sought for motor insurance. I was much surprised by the 55 per cent increase sought; as in his case, it came with a complete lack of explanation.
What shocked most, however, was the opening sentence of the letter announcing the new premium: the company professed itself “delighted” to offer this competitive quote.
On reflection, I can understand how it would be delighted, a sentiment which, I informed them, I did not share. Its representative seemed not to understand. – Is mise,
PÁDRAIG McCARTHY,
Sandyford,
Dublin 16.
Sir, – I can only sympathise with Sean Connolly’s account of the 30 per cent increase sought in his renewal notice for motor insurance. My increase was 100 per cent, though all my risk factors were either stable or reduced. The insurance company said that the “market for the category of risk you fall into has changed” but would not explain which risk factors had increased. I outlined my view of the categories my driving profile fits but could get no details at all from the company.
I then referred my case to the financial ombudsman. The reply was that the provisions of European Council Directive 92/49/EEC, which refers to the free market for insurance premiums, states that there is no obligation on a financial service provider to disclose or divulge to its customers its specific commercial rating details and that it is ultimately up to the customer to decide if the premium level is acceptable in return for the cover offered.
There is a fundamental error here. The market for motor insurance is not a free commercial market. We are obliged by law to have insurance to carry out another activity, driving, which itself is effectively a necessity for many. This is one of many instances where Government forces its citizens to buy a product in the market but then refuses to regulate that market. The failure to limit standing charges for waste collection is another recent example. Government always maintains that competition will prevent abuse of this imposed market but Adam Smith debunked that idea hundreds of years ago.
Incidentally, I am not offering any view on the merits of compulsory motor insurance in itself but it is not a requirement in all jurisdictions. – Yours, etc,
DONAL McGRATH,
Greystones,
Co Wicklow.