Insurance in Ireland what is going on?

pmeade1

In New Zealand, a similar sized country to ours by population motor Insurance is not compulsory. Down there, they pay a reasonable tax called ACC which covers costs in an accident. You can insure your car if you want. And if you choose to its not that expensive.

So I ask, why can't we adopt a similar system?

If we did it would take the stain off people trying to meet the every increasing, never decreasing compulsory insurance costs, not to mention the cost on young people starting off. But wait if we did something like that here then what would prop up the insurance and legal business! silly me.....
Imagine if we actually had a government that considered the best options for the people....

Jim2007

The ACC does not cover the cost of an accident as you state, it covers medical related costs on a no fault basis. That is not even remotely close to what car insurance covers. And while car insurance is not compulsory in NZ, most people with half a brain take it out to avoid be exposed to all the other potential claims in respect of a car accident.

As for car insurance itself, you should know that insurance companies do not make money out of insurance, they eventually end up paying out every cent they collect. In fact a well managed company is considered to be one that pays out around 105% of the premiums.

So it does not actually matter if it is a government agency or a private company, you'll still end up having to pay in the same amount or more, if the claims are to met.

The problem for the insurance companies is that they used to make their money on the interest earned on the premiums between when they collected them and when they paid out the claims. But with returns being so low, there in no profits to be made and companies are being forced to try and make money out of insurance.

If things continue as they are then I expect you'll see companies exit the market and in that case perhaps you will see some kind of kind of state body coming into place to fill the gap.

jacksie66

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NIMAN

My brother was in NZ for 6 months and couldn't wait to get out of the place, he said the price of everything was scandalous.

Says he doesn't know how people manage to live, buy property etc.

So I guess its not always greener on the other side. It might be cheap for car insurance, but obviously not cheap all over.

CiniO

pmeade1 wrote: »

In New Zealand, a similar sized country to ours by population motor Insurance is not compulsory. Down there, they pay a reasonable tax called ACC which covers costs in an accident. You can insure your car if you want. And if you choose to its not that expensive.

So I ask, why can't we adopt a similar system?

If we did it would take the stain off people trying to meet the every increasing, never decreasing compulsory insurance costs, not to mention the cost on young people starting off. But wait if we did something like that here then what would prop up the insurance and legal business! silly me.....
Imagine if we actually had a government that considered the best options for the people....

Ireland is in the EU, and so must fulfill EU directive requirements for car insurance. Every car in the EU must have valid third party cover covering all EU, so it's not like Ireland has any choice in here.

It's the cost of car insurance, amounts of claims paid, and general lack of proper regulation of an industry which causes some horrendously expensive premiums and that is a big problem, unknown to most of EU.

CiniO

Jim2007 wrote: »

As for car insurance itself, you should know that insurance companies do not make money out of insurance, they eventually end up paying out every cent they collect. In fact a well managed company is considered to be one that pays out around 105% of the premiums.

So it does not actually matter if it is a government agency or a private company, you'll still end up having to pay in the same amount or more, if the claims are to met.

Yea, sure - they don't.

What we actually have in Ireland between insurers is the biggest cartel you could imagine, ripping us all off, and you're saying they are not even making money.

They make millions - and it's simply just because they can. Cartel between them and lack of adequate legislation allows that.

jacksie66

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Nermal

NZ people just have necks and backs that aren't as prone to mysterious soft tissue injuries.

pmeade1

The ACC in NZ covers medical cost following an accident and get this, 80% of salary during recovery. It also helps reduces the claims culture that we are so used to here. Regarding insurance cost in NZ, and average family car, for example a 1.8 Toyota for 30-35 year old driver costs about €400-€500 for full comp. And as I said previously its your choice not compulsory to take out insurance.

I have been down under a couple of times and I agree with the comments regarding cost of living, it is costly like here but a real nice life style.

Regarding the previous comments about the poor struggling insurance companies not able to make money here in Ireland... I 'm welling up , might start a charity! It seems to me that for a sector that is so hard done by there is still a fair load of them here with their snouts in the trough. Maybe if they investigated more claims rather than paying out business might pickup.

I have been driving for 25 years, no claims but imagine this I have never seem my policy reduce, I suppose I can be happy in the fact that my hard earned cash is helping the poor hard done by insurance sector!

Jim2007

CiniO wrote: »

Yea, sure - they don't.

What we actually have in Ireland between insurers is the biggest cartel you could imagine, ripping us all off, and you're saying they are not even making money.

They make millions - and it's simply just because they can. Cartel between them and lack of adequate legislation allows that.

A rant bases purely on opinion rather than actual facts!

Go pick up the accounts of all the insurance companies and come back with even on that on a regular bases over the years pay out less than 80% of the premiums. No math needed, they make it easy for you, it's a note to the accounts.

Then go look at the P+L and tells us how often you find an insurance company who's income exceeds the interest earned on deposit is less than the net income.

Then you might have a point.

Jim2007

CiniO wrote: »

Ireland is in the EU, and so must fulfill EU directive requirements for car insurance. Every car in the EU must have valid third party cover covering all EU, so it's not like Ireland has any choice in here.

Well they could have kicked up a stink and got some kind of opt out like our neighbours used to do.

CiniO wrote: »

It's the cost of car insurance, amounts of claims paid, and general lack of proper regulation of an industry which causes some horrendously expensive premiums and that is a big problem, unknown to most of EU.

Most of the EU have civil law rather than common law, which means that a lot of the claims made in Ireland would not even get off the starting block! The typical fall down in a restaurant would only result in your medical bills being paid and that is about it, in most of the EU.

yoke

Jim2007 wrote: »

[...]
The problem for the insurance companies is that they used to make their money on the interest earned on the premiums between [...] .

That's actually the same thing. You're falling into the trap of thinking that if you have 1 million euro, and put it into a bank to get interest of €50k a year, if you spend the interest alone and don't touch the capital you'll still have a million euro at the end in the bank so you have lived for free.

This is a completely flawed way of thinking because a million euro right now might buy for example a million packets of crisps costing €1 each right now, but due to inflation (which is actually what funds your bank interest rate, and banks will never match inflation in their interest rates), in 50 years time each each packet of crisps will probably cost €4 (at 5% inflation per year) so your million euro will only be "worth" €250,000 - you've spent the rest thinking it was free interest.

Of course, during times like right now when there's little inflation, this method doesn't work and insurance companies "are forced into making money off premiums" - which is what they've always been doing, just hiding behind inflation.