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Brace yourselves for more expensive car insurance

Car insurance is collectively costing Northern Ireland motorists £136m a year more than if they lived elsewhere in the UK, it has emerged.

The shocking figure, released by the Consumer Council, has prompted an investigation into the industry here, where the watchdog claims companies can charge around £300 extra for annual cover.

Hardest hit are drivers in rural and low income areas, but the findings have also unveiled insurance premiums that are so expensive 33% of local customers can’t afford to pay for them.

Speaking to the Belfast Telegraph, Julie Megrath, head of Money Affairs at the Consumer Council said that savings can, however, be made by shopping around. Its says its research found that insurance customers here are collectively paying £160m extra in comparison with what the same policies cost in the rest of the UK.

“We estimate that of this figure, £136m relates to car insurance,” she said.

“This is a staggering amount of money which must be explained. We commend the ongoing input from the insurance industry, the legal sector and the Office of First and deputy First Minister in helping to understand why such differences in cost exist and to ensure that insurance in Northern Ireland is fair, affordable and meets the need of all consumers.”

She added: “However, an important message that we want to get across to consumers is that by shopping around for their car insurance they can make significant savings. On average consumers could save as much as £267 per year.”

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Investigating scenarios by region, the Consumer Council’s research showed a middle-aged driver in an affluent area of Belfast would pay £533 compared to £329 in Glasgow, while an employed middle-aged motorist living in a low income area of Londonderry would pay £605 compared to £431 in the North East of England.

Similarly, an older consumer living in a rural, affluent region of Fermanagh would pay £547 compared to £180 in a similar location in Wales, whereas a younger person who resides in a low income, rural part of Newry and Mourne would pay £1,111 compared to £474 in the Midlands.

And the Consumer Council highlighted the example of unemployed consumers living in low income areas, where a middle-aged driver in Belfast could be charged £908 for insurance — over £150 more than the next highest quotation in the North West of England.

Among the reasons put forward for the huge price discrepancies between here and elsewhere is the low number of insurers that operate in Northern Ireland.

The Consumer Council, however, says that while not everyone will get the cheapest premium, the potential savings for those who shop around are “significant”.

To this end, the Belfast Telegraph undertook its own internet investigation into the cost of insurance in Northern Ireland compared to other areas of the UK. We obtained four separate quotes from three price comparison websites for comprehensive cover for a female driver with a small car in Belfast, Ballymena, Birmingham and London.

All price quotations were obtained on 31/03/09, using identical criteria across all three search engines. For the purposes of our investigation we also varied professions, looking at the different costs incurred by a civil servant, journalist and accountant.

The cheapest deal for a Belfast civil servant, for example, on moneysupermarket.com was £279.90. However, in Sheldon in Birmingham, the same driver could be insured for the same car for £254.44 — a saving of 10%.

For a Belfast based journalist, the same comparison website quoted a figure of £321.54, compared to £293.16 for Birmingham, which was almost 10% cheaper.

The Consumer Council’s report found that the main sources for buying insurance here are through insurance brokers and direct from the insurance company. Buying insurance on the internet does not seem to be popular, despite the potential to access better value deals.

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