Average premiums hit €623 as dispute intensifies over legal fees, repair costs, and claims processes
Motor insurance costs in Ireland have risen 9% over the past year, with the average premium now reaching €623 and minimum premiums climbing to €397—the highest level since 2014—according to Central Bank figures.
The increases are placing additional strain on households already grappling with cost-of-living pressures, while insurers, legal professionals, consumer advocates, and government officials dispute the underlying causes.
Rising Claims Costs Drive Premiums
Central Bank data shows damage claims such as repairs have increased to €192 per policy, while injury expense claims stand at €205—below pre-pandemic levels. Damage claims accounted for 54% of settled claims costs last year, compared to an average of 29% between 2015 and 2021.
Robert Kelly, the Central Bank’s director of economics and statistics, noted that while average minor injury claim costs have fallen, this has been offset by increases in larger injury claims. The injury claims rate remained unchanged between 2022 and 2024.
Insurer Profitability Declines
Motor insurance company profits have fallen sharply, dropping from 12% in 2022 and 8% in 2023 to just 4% of total revenue last year. The total cost of settled injury claims is 16% lower than the 2015-2019 average.
Competing Explanations
Insurance Ireland CEO Moyagh Murdoch blamed higher legal costs and longer litigation resolution times for undermining overall claims performance. Legal costs rose 27% year-on-year, with legal fees accounting for 48% of total costs for claims under €100,000. Murdoch urged the minister to accelerate measures reducing legal expenses.
The Alliance for Insurance Reform attributed rising costs primarily to vehicle maintenance expenses driven by supply chain issues and labor costs. Chief Executive Brian Hanley identified these factors as the main drivers of premium increases.
The Law Society of Ireland rejected attempts to blame the legal profession, arguing that insurance companies are deflecting responsibility for rate increases by pointing to legal costs.
Government Urges Alternative Dispute Resolution
Financial Services Minister Robert Troy encouraged claimants to use the Injuries Resolution Board instead of pursuing court cases, noting the board resolves claims in half the time with similar compensation outcomes. Legal fees through the board are one-twentieth of litigation costs, potentially reducing premium burdens.
Troy announced publication of a new insurance reform action plan and progress on introducing a transparency code. The first cabinet sub-committee on insurance reform will meet next week.
Consumer Impact
The 9% increase exacerbates Ireland’s cost-of-living crisis, with vehicle owners caught between competing narratives about responsibility. While the Injuries Resolution Board offers a cost-effective alternative, a small percentage of claimants continue pursuing traditional litigation, contributing to higher system-wide costs that ultimately affect all premium payers.