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PUT BRAKES ON 'RIP-OFF' ; Probe into Young Drivers' Insurance

Jul 22, 2007


THE high cost of car insurance for young drivers is to be investigated by the state, it emerged yesterday.

Department of Transport officials want to find out if decreases in overall car insurance in the past three years have been matched in premiums for drivers under 24.

The decision to investigate the industry came after allegations young Irish people were targeted by major companies for their massive premium potential.

An independent consultant, commissioned by the Government, will carry out the review in the coming weeks.

Chairman of the Irish Drivers' Association John Lenihan said a review was needed.

He added: "Young drivers are overcharged because they are all tarred with the same brush.

"Just because one young man might be rash and have an accident, doesn't mean all young people will. What about the responsible young drivers who never have any accidents and make no claims?

"The level of insurance they are forced to pay is unreasonable and it is a very serious problem that needs to be addressed."

Mr Lernihan said he met Road Safety Authority executives in the last few weeks and had brought the issue to their attention.

He added: "We talked to the RSA about young people being ripped off by insurance companies and they took our views on board. They were very much on our side."

Investigators will compare premiums for Irish drivers aged from 17 to 24 against prices in other countries with similar insurance styles, like the UK. They will also look at future premium patterns and the number of potential road accidents involving young people.

The review will measure the impact of the Motor Insurance Advisory Board, a Government-appointed body that published a report in 2002.

It was aimed at lowering the cost of motor insurance.

The MIAB, chaired by Dorothea Dowling, made 67 recommendations to Government departments, regulatory bodies and the insurance industry.

The recommendations, many of which have been put in place, related to all parts of the market.

Overall the cost of insurance fell by 39 per cent between April 2003 and April 2007.

It dropped by around 16 per cent between May 2006 and April of this year.

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