Expert puts the brakes on extra saving hopes and reveals the only two ways car insurance prices will really drop in Northern Ireland

Motorists of all ages in the country have long faced the most expensive premiums but recent figures have shown that those between the ages of 17 and 44 have the cheapest cover in the UK.

News articles have provided further tips to accelerate ways around making extra savings, but one expert has slammed the brakes on rising hopes of insurance costs dropping further.

Andy Morton, the general manager of Sterling Insurance, has attributed the current decreases in prices of around 10% to a change in the personal injury discount rate, better known as the Ogden rate, that insurers pay. And he’s revealed the two other changes that would have an even greater impact in helping car insurance prices really drop in the future.

“It’s been a big boost for drivers in Northern Ireland to see their prices come down a little,” said Mr Morton.

“We work hard to try and bring prices in line with the rest of the UK but the high rate of serious accidents and having so many rural roads makes it incredibly difficult. The Ogden rate reduction has offered some respite and there are plenty of other ways drivers can chip away at their costs.

“However, until the government copies what’s happening in England, Wales and Scotland regarding rules around whiplash and claims management companies (CMCs), there’s a limit to what our company and others can do around cutting our prices. For that to happen, we’re going to need extra help.”

Motorists have faced spiraling insurance premiums since March 2020 for a wide variety of reasons including an increase in the number of claims, Covid lockdowns creating a shortage of parts and the war in Ukraine. But the picture is now starting to improve, as shown by the widely-reported CompareNI data.

Car insurance costs across all age groups still place Northern Ireland (£659) eighth out of the 12 UK regions though and Mr Morton believes his company’s “hands are tied” due to a lack of legislation.

He feels prices would drop further if the same fixed compensation tariffs for whiplash injuries and a ban on settling claims without medical evidence across the UK were implemented. In Northern Ireland, payouts are still assessed on a case-by-case basis and can range from £30,000-£60,000.

Regulatory frameworks being introduced for CMCs in NI would create a series of fixed costs and make it easier for insurers to factor planned overheads into their premiums.

“The cost of claims, and the frequency of pay-outs, remains a big problem in Northern Ireland for insurers and, unfortunately, that outlay has to be factored into pricing,” added Mr Morton.

“But we’ve already been able to drop our prices by 10% because of the Ogden rate. This has allowed us to pass some of our own savings on to drivers. As a broker, our job is to provide advice and help drivers cut costs by finding the best value for money cover that they need.

“We’d love to keep making those savings but there really is only so much we can do. We need the Northern Ireland Government to act to really help us help motorists because our hands are tied.”

The Ogden rate - now set at +1.5% rather than -0.5% - is used in personal injury and accident compensation claims. It calculates how much someone should be awarded for future financial losses, like loss of earnings or care costs, and is set to ensure nobody is overpaid or underpaid.

For insurers, a small change in this figure can save millions because payouts for large claims like catastrophic injuries are substantially reduced. The rate will not be reviewed again until July 2029.