Why is car insurance so expensive in northern ireland?

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Car insurance NI is in general more expensive than the UK, in this article we explore some reasons that Northern Ireland residents pay more for standard car cover, including higher prices for young driver insurance Northern Ireland. During the troubles, cars were stolen on a regular basis and in many cases ended up burnt out or blown up by the army. Now, thankfully the troubles are a thing of the past, why do we still pay more for car insurance NI? A paper released by the Northern Ireland Assembly Research and Library Service in 2011 sought to explain the discrepancies between insurance prices in Northern Ireland when compared to the rest of the UK.  In 2011 the Consumer Council for
Northern Ireland (CCNI) found that premiums for similar car insurance products were 84% higher than that in the UK. 

BelfastDerry/LondonderryScotlandWalesMidlandsEast Anglia
Median £553 £578 £329 £311 £390 £218
Cheapest £311 £326 £214 £186 £309 £146
Number of Providers131348515150

Consumer Inertia vs. Higher Costs?

This was the title of one of the paragraphs which focused on the fact that if NI customers were to shop around they could on average save as much as £267.  In other words, customers lack of willingness to compare the market come renewal time resulted in lost opportunities to find a better deal on their car and also other insurance products. This is understandable you get your first insurance with the same local provider as your parents, the service is good, and you have a personal relationship so why change. However, given that you could potentially make significant savings, loyally should take second place, 

Quote from paper  "even with our higher premiums, consumers who shop around could save as much as £267‟

Fewer NI insurance Companies 

The table highlights that the number of insurance companies in Norther Ireland is significantly lower than other regions of the UK. This could 

As with all insurance policies, limits and exclusions will apply, so do check these to understand these or to negotiate different limits in advance if taking out your home insurance policy. In general, where you have less competition, you are less likely to make provide additional discount or indeed lower the price for insurance. No evidence was available to prove that NI brokers were actually making more money by charging higher premiums, or was the difference absorbed by higher payout charges.

Higher Number of young male drivers

If NI insurance providers were actually taking on higher risk, for example a higher number of young male drivers than in other parts of the UK under the survey, then part of the difference could be accounted for by higher premiums charged for younger drivers.  With NI being mostly rural and having access to a car is necessary to get to work or social activities, it is more likely that NI does have  a higher number of younger drivers., which would account for some price difference.   

Crime Rates and Fraudulent Behaviour

This rests on the fact that postcodes with higher crime rate will pay more for insurance, but this was shown not to be the case. a and that in NI.  For example, the crime rate in Newry was about half of that in Belfast, but those living in Belfast paid (on average) less for car insurance.  

The crime rate does not take into account what is labelled fraudulent behaviour or the claim culture. This is the classic claim for non existent injuries, neck injury being the classic example. From my own experience, this culture did prevail with a minority in Northern Ireland, but a minority can have a big impact on what others have to subsequently pay out in terms of insurance premiums. This is my personal opinion,  

Quote from paper  " The ABI estimates that the total cost of undetected general insurance claims fraud in the UK is in the region of £2bn per year. This adds approximately £40 a year to the insurance premiums paid by all policyholders.‟

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