What’s the problem with car insurance?

Car insurance costs in Ireland are out of control. Almost everyone has seen their insurance costs increase dramatically – even if they have never made a claim, or they know someone who has had this experience.

Socialist Worker

What’s the problem with car insurance?

Dave O’Farrell

This is a very serious issue for a large number of people for whom a car is an absolute essential for simply living their daily lives – particularly given the states ever decreasing funding for public transport.

Many excuses have been offered for these spiralling costs but they don’t stand up.

Insurance companies claim it is due to the rising cost of claims yet Garda statistics show a drop in accidents and there was a reduction of 44% in the costs of claims between 2007 and 2012.

The Government claim we need a more competitive insurance market yet there are already twelve insurance companies operating in Ireland and all are engaged in pushing up premium costs.

The only argument offered by either the Government or the companies that holds any water at all is the legal costs associated with claims but the Government refuses to attempt any significant reduction in legal fees.

The real cause of the increase in premiums lies with the insurance companies attempting to increase their profits. Prior to the financial crash many invested heavily in financial speculation, this was a massive profit driver during the “good times” but resulted in serious losses during the crash and negligible profit growth since. Now in an effort to increase profits they are fleecing drivers.

A lack of decent public transport means many have no alternative but to drive and car insurance is a legal requirement not an optional extra. This leaves people at the mercy of an insurance industry whose only interest is their bottom line.

Solutions

Solutions to these problems do exist – and they are straight forward.

  • A public insurance company, run on a not-for-profit basis to provide cheap third party insurance for all drivers. A system like this has run in Manitoba in Canada for many years.

  • A state run not-for-profit legal service – with a clear cost structure – to deal with the cost of court cases.

  • Legislation to make discrimination against younger drivers or those with older cars (or indeed many of the other spurious reasons sometimes given for higher costs) illegal.

  • Investing in public transport to offer people alternatives to car use.

How do we get these solutions?

It seems quite clear that the Government and the companies completely opposed to the measures described above. This means that we will have to force their hand; thankfully recent years have reminded people just what we need to do to make them act.

We have to rely on people power.

From the water charges campaign to the inspiring occupation of Apollo House it is movements of ordinary people getting organised and challenging the status quo that have been most effective at forcing change in the political system.

A movement of drivers across the state – including professional drivers like taxi drivers and hauliers – willing to take mass action including demonstrations and civil disobedience can exert exactly the type of pressure needed to get action on this issue.

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