The average cost of motor insurance fell in 2006 despite an increase in the frequency of road crashes, a report by the Financial Regulator shows.
In 2006, there were 7.0 crashes for every 100 comprehensive insurance policies compared with the 6.7 the previous year and 5.2 crashes per 100 third party, fire and theft policies, compared with 4.9 the previous year.
However, the impact of these increases in accident frequency on insurance premiums was offset by the reduction in the cost of claims which the regulator linked to the establishment of the Injuries Board, the statutory body set up by the Government to handle claims instead of the courts.
Over the course of 2005 and 2006, the report indicates there was a decrease in average costs per claim, by 15 per cent for comprehensive cover and by 17 per cent for third party fire and theft.
There was a 10 per cent decrease to over €4,200 per claim for comprehensive cover while third party fire and theft claims reduced by 1 per cent to just over €6,100 per claim.
Although there are many factors which can influence the cost of claims, the Financial Regulator noted that the Injuries Board, which had its first full year in operation in 2005, may be contributing to the fall in costs per claim.
The report said premiums decreased in 2006 for the third successive year in the comprehensive category and for the fourth successive year in the third party fire and theft category.
The percentage of costs finalised one year after an accident is reported increased by 11 per cent for both comprehensive and third party, fire and theft cover.
The Financial Regulator’s consumer director Mary O’Dea said: "Overall the results of the report are very positive and encouraging.
Ms O’Dea said: “The effects of the Injuries Board are notable, with the findings indicating that they may have had a positive impact, both in increasing the speed of settlements and in reducing the associated costs.
“The results also show that, in 2006, consumers continued to benefit from reduced premiums. While there has been some suggestion that this trend has reversed, it is still possible to get a good deal on your insurance and I would encourage consumers to either switch, or negotiate with their existing provider, if they find better value elsewhere," she added.
