Car insurance premiums jumped by an average of €51, or 9%, last year – increasing three times as fast as the cost of claims, the Central Bank reported yesterday.

The average motor policy rose to €623 between 2023 and 2024 while claims costs were up just 3% to €397 in 2024.

Ivan Cooper of the Alliance for Insurance said: “Such a significant increase in premiums is directly con – tributing to the cost-of-living crisis.”

He added: “Notwithstanding the increasing cost of vehicle repairs, injury claims account for more than half of the overall cost of settling motor claims, and we urgently need to see more claims settling at the Injuries Resolution Board.”

Damage claim costs increased to €192 per policy, while injury claims cost are lower than pre-pandemic levels at €205, the Central Bank’s latest annual Private Motor Insurance Report shows.

The cost of injury claims was stable between 2022 and 2024, and lower than the pre-Covid average of €257 for 2015-19.

The average cost of smaller injury claims has fallen in recent years, but this has been offset by an increase in the average cost of larger injury claims, the report said.

Expected claim costs as a percentage of premiums received were 68% in 2024.

Last year, 93% of policies sold were comprehensive cover, “which is consistent with the 2023 findings”, the report said.

Insurance Ireland, which represents the industry, defended the increasing costs of cover, blaming a lag between “claims costs and premiums”.

A spokesman said of the fact that premiums are rising much faster than costs: “Claims costs increased in 2023 and, given that premiums are primarily dictated by the cost of claims, increased 2023 claims costs would have fed into pricing in 2024.

“This would have contributed to increased premiums in 2024, which are still well below their peak in 2017.”