Cost of Motor Insurance

Lord Dodds of Duncairn Excerpts

Tuesday 8th November 2011 Commons Chamber

[Jim Shannon (Strangford) (DUP)]

I congratulate the hon. Member for Liverpool, Riverside (Mrs Ellman) on introducing the debate. Car insurance and premiums is a big issue in Northern Ireland. Just two weeks ago the hon. Member for South Down (Ms Ritchie) secured an Adjournment debate on insurance in Northern Ireland, for which Northern Irish Members were present. It is good to be involved in the bigger issue for the whole of the United Kingdom, because we are part of the UK and as such we are concerned about the issue.

The Consumer Council for Northern Ireland has produced figures demonstrating that the cost of car insurance is comparatively higher in Northern Ireland than in England and Wales. It is accepted that there is a disparity, and the insurance companies and many other people understand that to be the case. There is, however, a lack of understanding and analysis of the factors that have resulted in the higher costs.

There has to date been a lack of informed discussion about the cost of car insurance in Northern Ireland. The premiums for us are clear, and those of us who pay their insurance are aware of that.

[Mr Nigel Dodds (Belfast North) (DUP)]

On average, premiums in Northern Ireland are 84% higher than in other regions of the United Kingdom—a startling figure given the high cost of insurance premiums across the UK as a whole. My hon. Friend is right to point out the particular problems in Northern Ireland.

[Jim Shannon]

Clearly, the fact that premiums are 84% higher shows what we in Northern Ireland have to bear. Part of the role of the cross-departmental ministerial Committee is to address that issue.

Premiums are high in Northern Ireland, but the number of compensation claims is falling, whereas in England and Wales it is increasing. The number of claims notified to the compensation recovery unit has reduced by 23% in Northern Ireland over a nine- year period, and over the same period it increased in England and Wales by 17%. It is a clear disparity—84% dearer insurance to start with, despite the fact that our claims are reducing. We have to ask why premiums are so high in Northern Ireland.

In 2009 the CRU was notified of 29,467 claims for compensation. In 2010 the county court of Northern Ireland made awards in only 768 civil bills for personal injury claims. The vast majority of claims are dealt with without the need for determination by the court. Again, claims are down but we are paying extremely high premiums.

In England and Wales a claim for damages arising from personal injury will routinely involve detailed claims for future caring costs. In Northern Ireland, these costs are reduced as injured persons will often be cared for by family members. That is perhaps the nature of us in Northern Ireland, but it is a factual example. In 2010, 87% of awards for personal injury in the county court were for less than £5,000. When there are claims, the average claim is small. That is important to note.