Belfast Telegraph
Monday, 30 March 2009
Consumers in Northern Ireland are being ripped off by having to pay hundreds of pounds more for insurance than the rest of the UK, according to new |research.
The Consumer Council said Northern Ireland households on average shell out almost £300 more a year in premiums when compared with households in Great Britain, and for some that figure is much higher.
The findings, part of the Council’s new report into the cost of coverage in the province, has led the consumer rights body to call for an investigation into why consumers are getting such a raw deal when it comes to insurance.
“The car, contents and buildings insurance market is clearly not working for consumers. Compared to Great Britain, households here are paying nearly 40% more, leaving consumers £160m worse off per year. While we are all hit hard, some households are hit particularly hard,� said Eleanor Gill, Chief Executive of the Consumer Council.
She said the research found that consumers pay 84%, or £282, more on average for car insurance in Northern Ireland.
Households with car, contents and buildings insurance in rural areas pay 62%, or £362, and households in low income areas pay 48%, or £345, more than in Great Britain.
Breaking results down by |region, the research showed a low income household in Belfast headed by an older person would pay £816 for their insurance compared to £575 in Glasgow, while a household headed by a younger person in a low income area of Fermanagh would pay £1,366 compared to £777 in rural East Anglia.
“A recurring frustration for consumers here is that many attractive insurance offers come with the tag ‘not available in Northern Ireland’. Our research confirms that we do have less choice of |insurance providers — the maximum number offering quotations for car insurance here was 15 compared to 51 insurers in Great Britain,� said Ms Gill.
“Another worrying aspect of this research is that a third of consumers do not have their homes insured. When asked why, they tell us that they can’t afford it or haven’t got round to it. There is a potential disaster waiting to happen for these households if something goes wrong, so there must be an urgent drive to |increase consumer protection.�
Around 30% of consumers here do not have contents insurance and 36% do not have buildings |insurance.
Ms Gill said there are opposing views on the reasons why insurance here costs so much more.
“The problem could lie with the practices of the insurance companies, the legal system, the consumer or any combination of the above. Further investigation is urgently needed, particularly at a time when all households and businesses are trying to keep their costs down,� said Ms Gill.
“We commend the associations for insurers and brokers and the Law Society for continuing to work with us as we try to understand why insurance costs more here. Consumers need insurance that is fair, affordable and that is appropriate to their needs. To that end, the Consumer Council will be focusing on encouraging more switching and a greater uptake of insurance protection for consumers.�
Despite the higher costs and fewer providers, the council believes it is possible for people to save money when buying insurance by shopping around, rather than just renewing an existing policy.
