Motorists in Northern Ireland are encountering significantly higher insurance premiums compared to those in the Republic of Ireland, with various factors contributing to the increased costs.
Gary McClarty, director of MCL InsureTech Limited, which operates the GetSetGo and its4women brands on both sides of the Irish border, highlights the disparity in car insurance costs that can inflate premiums by up to £823 for younger drivers.
The rising cost of motor insurance in Northern Ireland has been widely discussed, with causes attributed to inflationary pressures, limited market competition, and higher personal injury awards. McClarty points out a major but often overlooked factor: the high cost of settling non-fault claims.
As MCL InsureTech operates on both sides of the border, it explains that it has access to data on accident frequency and claim settlement costs. The frequency of third-party damage claims in Northern Ireland is 162% higher, and the average cost of settling these claims is 60% higher than in the Republic of Ireland. This difference adds £248 to the average motor insurance premium, even after accounting for exchange rates.
The impact is even more severe for younger drivers, who face a claim frequency over 300% higher, adding £823 to their average premium. One significant factor is the presence of accident management companies in Northern Ireland, which often encourage customers to make claims through them rather than directly contacting their insurers.
“While non-fault claimants benefit from preserving their no-claims bonus and avoiding excess recovery, these companies often inflate the overall claim settlement costs,” McClarty said. “A significant contributor to these increased costs is the expense of hiring cars for non-fault drivers, which can be as high as several hundred pounds per day. In many instances, the cost of car hire exceeds the cost of repairing the vehicle.”
For the first time in his career, McClarty says that he has observed that the average cost of car insurance is now cheaper in the Republic of Ireland than in Northern Ireland, and in many cases, even cheaper than in Great Britain.
“Yes, personal injury costs are higher in Northern Ireland compared to Great Britain, but the way claims are handled across the UK is dysfunctional and is another factor driving up costs,” he said.
The significant disparity in insurance premiums calls for a comprehensive review of the factors influencing these costs and the introduction of measures to address the inefficiencies and imbalances in the system, according to McClarty.
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