21/10/2009

Insurance Costs Sky Rocket

The cost of insurance is skyrocketing in a number of sectors, according to new figures.

One of the worst affected areas is home insurance, where householders can expect increases by over 20% and up to 40% on their premiums.

Insurance company AA Ireland said there were a number of reasons for the price rises.

The company pinpointed issues such as more expensive fittings and furnishings, recent severe weather conditions, and increased numbers of fraudulent or exaggerated claims, and a government levy on home insurance policies increasing all policies by 3%.

An AA Ireland spokesman said: "None of these factors in isolation would add up to the hefty increases that we are seeing, but the combination is driving prices up sharply. This will affect all home insurance policies irrespective on the provider but the consumer should still keep their eyes open and shop around."

A survey by accountancy firm Deloitte published today has also found increases planned by the majority of motor insurance companies for next year.

Half of motor insurance companies said they expected to allocate increases of between 5%-10%, while one-in-five have plans to hike premiums by more than 10%.

Motor insurers saw their profits drop sharply to €35.1 million last year, just under a tenth of what they were in 2007 and are claiming that fraudulent applications are the main cause of their increases.

The unprecedented surge in unemployment in Ireland since the beginning of 2008 has also led to a dramatic increase in unemployment cover on mortgage payment protection policies.

(DW/KMcA)

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