Car insurance costs are falling but the cost of repairs is going up, a transport commentator has said.
An annual motor insurance report from the Central Bank has found the average premium cost per policy decreased by 7% to €568 between 2021 and 2022.
However, the average cost of a damage claim increased by 20% last year. This means the average cost of damage claims is up 35% since 2020.
Claims as a percentage of premiums increased to 61% in 2022, up from 47% the previous year.
Transport Consultant Conor Faughnan told The Pat Kenny Show things are moving in the right direction.
"New personal injury guidelines went live [in] April of 2021 and we're starting to see those wash through," he said.
"That is leading to an improvement, both in the cost of settling those personal injury claims and in the speed at which they're being done.
"Basically, the PIAB [Personal Injuries Assessment Board] system is working better under the new guidelines.
"It'll take some time for that to wash through but the trend is good."
'Cost of parts and labour'
Conor said repairing a car is actually costing more than it used to.
"The cost of repairing cars rocketed up," he said.
"That's to do with the cost of parts [and the] cost of labour."
Conor said that, with all things being equal, a collision is resulting in slightly less personal injury payouts but higher repair costs.
"We do have to sort of step back a bit from this... it's not a one-year thing," he said.
"Insurance companies themselves have to think in seven-year cycles, so there will be individual years where you look at the number and say 'God, they're making a fortune'.
"You have to take a longer view".
Conor said while personal injury costs for motor claims have come down, that's not the case for commercial insurance.
"It's not a problem fixed, but the macro trend at the moment is not bad for the consumer," he added.
Some 50% of all injury claimants were settled under the Personal Injuries Guidelines compared to 16% in 2021.
Damage claims made up 46% of settled claims costs - up from 30% in 2021.
