Inflation and rising parts and labour costs, an increase in vehicle theft, more complex and costly repairs for modern vehicles, a higher rate of serious road injuries and fatalities compared to other UK regions, Generous compensation levels for minor injuries, unlike the fixed-tariff system used in England and Wales
Car insurance premiums in Northern Ireland have surged by 42% over the past financial year, according to new data from the Office for National Statistics. The sharp rise has raised serious concerns about the fairness and transparency of insurance costs, BBC News reports.
In response, the UK government has launched a dedicated taskforce to investigate the issue. Transport Secretary Louise Haigh called the spike in premiums a "major concern," stressing that access to affordable insurance is “an essential, not a luxury.” The taskforce will bring together industry experts, consumer advocates, and regulators to identify the root causes and recommend solutions.
Unique Pressures in Northern Ireland
Ulster Unionist Party MP Robin Swann highlighted the need to address the unique challenges in Northern Ireland, noting that local issues should be treated with the same urgency as those in the rest of the UK.
Several factors are driving the increase in premiums:
According to Mark Shepherd, head of general insurance policy at the Association of British Insurers, these pressures are pushing premiums higher nationwide.
An Ernst & Young report from 2023 found that insurers are now paying out £1.13 in claims and expenses for every £1 collected in premiums—raising concerns about the sustainability of the current insurance model.
In Northern Ireland, the situation is further complicated by:
Potential Relief Ahead
A government-led review of personal injury compensation rules may offer some relief. Proposed reforms—taking into account current interest rates and payout structures—could lower average premiums in Northern Ireland by around £90. The outcome of the review could mark a significant step toward stabilising the insurance market and easing the financial burden on drivers across the region.
