The Consumers Association and AA Ireland are urging the government to set up a new inquiry into the car insurance market, with concern growing over the spiralling cost of premiums.

An increase in the number of claims has seen premiums rise over recent months, although the main concern appears to be the number of drivers using lawyers to seek compensation after an accident. Internal financial issues with insurance companies such as low reserves and poor investment returns have also been blamed for rising premium costs for motorists.  

A similar inquiry in 2002 by the Motor Insurance Advisory Board, made many recommendations, such as the establishment of the Injuries Board, which brought about lower premiums.

Michael Kilcoyne of the Consumers Association said there was a need for a new government-appointed inquiry into insurance costs and believes this should look at; capping claims costs, the practices and operations of insurers, the overseeing role of the Central Bank, and uncompetitive practices in the industry.