The cost of motor insurance was up again last month, rising by 2.8pc when compared with last year, according to the Central Statistics Office (CSO). It was the fourth month in a row that motor insurance costs went up.
House insurance was up by 9.1pc in the year. This is more than twice the general level of inflation, which was 4.6pc in the year to December.
The cost of health insurance was 10.5pc up on last year, with VHI, Laya and Irish Life Health citing a surge in the number and cost of claims for treatments in private hospitals for the rise in premium rates. Travel insurance was 7.3pc more expensive, the CSO said.
Insurers have blamed a sharp rise in the cost of building materials for the rise in home insurance. This is making repairs and rebuilding costs more expensive when there is damage to houses. Higher vehicle parts costs are being blamed by the motor insurance industry for the rise in vehicle premiums.
The higher cost of motor cover comes despite a sharp drop in the cost of settling claims, after judges agreed almost three years ago to guidelines on award levels that are up to 40pc lower than previously. Higher insurance costs contributed to the Consumer Price Index, the official measure of inflation, rising by 4.6pc between December 2022 and last month. This is up from an annual increase of 3.9pc in the 12 months to last November, according to the CSO.
Higher prices for package holidays, rising insurance premiums, increased mortgage and rent costs, and rising food prices put the squeeze on household budgets.
However, the December reading represented the second consecutive month since September 2021 that the annual growth in the index has been below 5pc.
Excluding energy and unprocessed food, the index rose by 5.8pc in the 12 months to last December. This is known as core inflation.
The main factors contributing to the annual change in inflation in December were higher prices for alcoholic drinks and food consumed in licensed premises, restaurants, and cafes. There was also an increase in the cost of hotel accommodation. Statisticians also recorded a rise in the cost of mortgage interest repayments, rents and services for the maintenance and repair of dwellings. This increase was partially offset by a reduction in prices for electricity, gas, home-heating oil and coal.
Higher prices were also recorded for package holidays, participation in recreational and sporting services, cultural services and products for pets. This was partially offset by a reduction in costs associated with educational textbooks, the CSO said. Food and non-alcoholic beverages prices were up by 5.6pc in the past year. The rate of increase is still high but is down on the level of increase in previous months. There was no change in food and non-alcoholic drinks prices in the month of December.
The CSO said there had been price increases across a range of products, such as vegetables, bread and cereals, meat, mineral waters, soft drinks, fruit and vegetable juices, sugar, chocolate and confectionery. But these rises were offset by price cuts on other grocery items.
Switching Saturday: Motor Insurance
Statistician Anthony Dawson said there had been price increases last month for a 2.5kg bag of potatoes, which went up by 36c in the year. Irish cheddar cheese was 21c dearer a kilogram than last year. However, there were decreases in the price of a pound of butter, down by 9c, and two litres of full-fat milk, which was down by 8c when compared with December 2022.
For last year as a whole, the annual average rate of inflation was 6.3pc. This compares with an increase of 7.8pc for 2022 and an increase of 2.4pc for 2021.
The largest year-on-year price increase was recorded last February when prices rose by 8.5pc compared with the previous February.
Asked about insurance cost rises, Insurance Ireland claimed that Irish consumers continue to benefit from the various reforms introduced by government and are currently paying some of the lowest motor premia in Europe.
The “slight increase in motor premiums in recent CSO figures reflects inflationary pressures in the supply chain for motor repair costs and in no way compares to the significant quantum of reductions over the last six years”.
It said road fatalities and the cost claims have increased.
On home insurance, Insurance Ireland said rebuilding costs have risen.
