The Consumer Council Item

It’s Official: Northern Ireland Consumers Pay Up To 70 Per Cent More For Their Car Insurance, Says Office Of Fair Trading

Wednesday 14 December 2011

As the Office of Fair Trading (OFT) today (14 Dec, 2011) publishes the results of its investigation into the car insurance market in the UK[1] , the Consumer Council says the high cost of car insurance in Northern Ireland (NI) must be tackled. The report shows that in 2010, consumers living in rural areas of NI paid between 30 and 70 per cent more for their car insurance, compared to consumers in rural areas of GB.

Speaking about the findings, Antoinette McKeown, Chief Executive of the Consumer Council said:  “This report shows what the Consumer Council and motorists across NI already know – that car insurance is considerably more expensive here[2].  However, today’s report quantifies the problem and shows beyond doubt that urgent action is needed, particularly for rural consumers.  The rural nature of NI means many thousands of people are dependent on their car to take jobs, attend college and visit family and friends.[3]  High car insurance premiums therefore put rural consumers at a huge disadvantage and can often exclude them socially and economically.   We are now urging the NI Assembly and Westminster to take practical action to address the imbalance for motorists here, particularly young drivers.”

The OFT report also suggests that not all consumers are shopping around and getting the best deal.

 “We have the lowest levels of financial capability of any region in the UK[4]and our feedback from consumers is that some people are having real difficulties shopping around due to the complexity of insurance products.  The OFT report is further evidence that Northern Ireland requires a financial capability strategy to help people develop the skills and confidence to get the best deal for them and keep more money in their pockets,” added Antoinette McKeown.

The OFT report identified additional reasons why consumers in NI pay more for their car insurance, such as:  personal injury settlements are higher, differences in legal processes lead to higher legal costs and road safety has an impact on premiums. Continuing, Antoinette McKeown said:  “Our Justice and Environment Ministers have a clear role to help reduce premiums and the Consumer Council will continue to work with them on the specific actions that can be taken to achieve this.  The OFT also reports that it will be launching a market study into specific areas of the UK car insurance market, we will continue to work with OFT and the Financial Services Authority (FSA) to ensure NI consumers’ voice is heard in these ongoing investigations.

Concluding, Antoinette said; “The Consumer Council says a huge thank you to over 5,000 consumers who responded to our petition to lower car insurance in NI and told us about their experiences purchasing car insurance.  Their contribution has been formally acknowledged by the OFT in its report.  Our commitment is that we will continue to work closely with both the NI Assembly and Westminster to do all we can to drive down the high cost of car insurance for consumers in Northern Ireland.”  

ENDS

-Consumer Council media contact: Irene Overend  / Keelin Kelly telephone, 028 9067 4816 / 028 9067 4807 or 07825147496 / 07799032203 or e-mail, ioverend@consumercouncil.org.uk  / kkelly@consumercouncil.org.uk

Notes to Editors

·        The Consumer Council launched a four pronged campaign on 31 August 2011 to reduce the high cost of car insurance in NI.  Car insurance premiums here have risen by 73 per cent[5]in the last two years and the average yearly premium is now £923.90.  

·        The campaign consisted of four strands:  a formal submission to the OFT to enable it to examine the car insurance market here; a meeting with the Department of Justice and the Justice Committee to examine the impact of the costs associated with claims here; a meeting with the Environment Minister to ask for practical initiatives to support younger drivers and launching an online petition for consumers to pledge their support to the campaign and to hear their stories of how the high cost of car insurance affects them.  Consumers can sign up atwww.consumercouncil.org.uk

·        This campaign was launched against a backdrop of:

o       Households in NI spending on average around 35 per cent more on energy compared to the UK average.

o       Expenditure on food is also around 14 per cent higher in NI.

o       Across all expenditure items households in NI spend around 5 per cent more than the UK average.

(Figures are from the Family Expenditure Survey 2010 (2009 prices).

o       NI consumers have faced the highest price within the UK for petrol, diesel or both every month so far in 2011.  (Source:  AA Fuel Price Report)

-The Consumer Council is an independent consumer organisation, working to bring about change to benefit Northern Ireland’s consumers. The Council campaigns for high standards of service and protection and a fair deal for all. It also carries out research, gives advice and publishes reports and other publications. It deals with individual complaints about buses, trains, planes, ferries, natural gas, electricity, coal and water.  Consumers can contact the Consumer Council by calling 0800 121 6022, visit our website www.consumercouncil.org.ukor follow us on Facebook or Twitter.